This is part 3 of an ongoing series on Sustainably Smart Pune project Survey Data. Check out part 1 and 2 of the series.
Expenditure pattern of Ghole Road ward residents of Pune is analysed in this part. Expenditure is analyzed for 2 categories: a) Expenditure on housing (Rent/ Loan) b) Expenditure on transportation. This is done to understand the affordability of shelter and movement for the different economic classes. Expenses are expressed as a percentage of the household(HH) income.
6. HOUSING EXPENDITURE
Among the surveyed population, more than 55% of all categories do not have any expenditure on housing. For HIG and MIG, this translates to more than 50% house ownership. For most of LIG and slums, no housing expenditure is mostly due to temporary/illegal settlements, housing provided by employer or unauthorized colonies. The slums and LIG families who own houses, have temporary or dilapidated structures.
In HIG and MIG categories, almost 40% people spend 10-30% of their income on housing as rent or housing loan. For LIG and slums, 25% spend 10-20% of their income on housing. It is also noteworthy that a comparatively larger proportion of people in LIG and slums are spending 50% or more of their incomes on housing!
As real estate prices are soaring in the city, it is increasingly becoming unrealistic for people to own houses, especially for the migrants. Pradhan Mantri Awas Yogna , the affordable housing scheme launched in 2015 has Pune in its list of implementation cities. In addition to it, government has also announced tax subsidies for housing loans upto 9 lakhs and 12 lakhs. Even then, the increasing land prices in city has made it difficult for affordable housing projects. Most of the constructions that is taking place is targeted at HIG and to some extent MIG, whereas the real need is affordable housing at accessible locations for LIG and slum dwellers.
In the ArthaYantra Buy or Rent report 2017, Pune has become more unaffordable than Bangalore. It is advisable for household with annual income upto 14 lakhs, to rent a house in Pune than to buy it.
7. TRANSPORT EXPENDITURE
For monthly travel, HIG and MIG spend up to 10% of their income on an average. This includes petrol expenses, public transport, taxi expenses etc. For LIG and Slum, the travel expenses are less than 5% as their daily mode of commute is either cycling or walking. More than 20% households of LIG and slums spend nothing on transport.
The World Bank report on 'Affordability of public transport in developing countries', says: Affordability refers to the extent to which the financial cost of journeys put an individual or household in the position of having to make sacrifices to travel or the extent to which they can afford to travel when they want to. While a family on a low income might be able to afford the necessary journeys to work for the income owners of the family, they might not be able to afford trips to school for their teenage children, or for their children to visit a grandparent in hospital. There is a widely held belief that potential low income passengers are forced to curtail the number of trips that they make, use modes of transport that do not incur a direct cost, such as walking or cycling, or to live in locations that minimize their transport costs.
This is true in Pune’s case as many LIG and Slum households complained of poor service and expensive public buses as a major reason for their reduced commute. More than 60% of the trips of LIG and slums is by walking.
It needs to be noted that even though the graph shows percentage travel expenses for the different income groups as almost same, the actual amount is hugely different.
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