<div>Meet The Duggals. They lead a simple life, live in a Delhi Development Authority (DDA) flat (which weren’t really made to look swanky) and own a scooter. Head of the family, Mr D, ekes out a living as a school teacher and adores his wife and tries to be strict with his children. Mrs D loves him back, but she probably loves living it up more. The children are, well, children. They want what they can’t get or have to whine to get. And then, there’s the scooter. Yes, a two-wheeler for four people. That’s middle-class life, right there.<br /><br />In essence, The Duggals are the epitome of middle-class living.<br /><br />When Planman Motion Pictures released <em>Do Dooni Chaar</em>, last year, little did they realise how it will strike a chord with millions of middle-class Indians out there. The film received rave reviews from critics, and the box office numbers added more feathers to its cap. <br /><br />Why was it that there were hordes of people queuing up to watch the movie? Even the youth loved it, which was surprising, given the absence of ‘youth-icons’.<br /><br />What struck a chord with half the population was the feeling that this was their story, playing out on the big screen. Small, primitive flat on rent – check. Two-wheeler for a family of four – check. All signs of basic, simple living – check. An extreme desire to be better-off and live a life of not necessary luxury, but higher than rudimentary living. A car, neither a Maruti, nor a Toyota, but maybe a Hyundai – on loan, of, course. And yes, a flat with a few modern amenities.<br /><br />Meet the Urban Aspirers – The Duggals of real life. <br /><br /><strong>Of Aspirations<br /></strong>The term, Urban Aspirers, coined by the Boston Consulting Group in association with the CII, defines what roughly 19 million households are – what is called the Middle Income Group (MIG). They have successfully eked out a place for themselves between the ‘haves’ and the ‘have-nots’.<br />Urban Aspirers constitute a neat 8 per cent of Indian households, preceded only by Strugglers, a whopping 50 per cent, and Small Town and Rural Next Billion at 24 per cent.<br />That translates into an annual household income for Urban Aspirers that falls between $7,400 and $18,500 and ownership (for two-thirds of their population) of basic television, single-door refrigerator or LPG stove.<br /><br />The same is true for less than one-half of the Rural Aspirer population (at 14 million households, 6 per cent of the population). While two-thirds of Urban Aspirers believe, in two years’ time, their lifestyle will be better than what it is now; only 53 per cent of their rural counterparts feel so.<br /><br />Urban Aspirers are typically characterised by their urbaneness, higher spending power and their propensity to spend compared to their rural counterparts. This Aspirer class will be driven by the urge to mimic their Affluent counterparts, but what will set them apart is their relatively watchful approach to discretionary spends.<br /><br />The BCG says some 300-400 million people will migrate to cities over the next 25 years. With this part of the population playing such an important role in the India growth and consumption Story, the Urban Aspirers of today will end up becoming the New Affluents of tomorrow.<br /><br />The one common thread between Aspirers, both Urban and Rural is the dream of owning a house they call their own. The Urban counterparts, with their stable jobs (if not necessarily double income but controlled discretionary spend), are the target audience banks and other lenders look out for, to provide a home loan that stretches for two decades.<br /><br />What also binds these millions together is their hunt for a house that is actually affordable. Given the current housing shortage - conservative estimates put the 11th Five Year Plan (2007-2012) at 26.53 million dwelling units - finding affordable housing is a tricky problem.<br /><br />In a 2010 report on Affordable Housing, global consultancy KPMG and CREDAI broadly defined affordability in buying a house based on three key parameters: income level, size of dwelling unit and affordability.<br /><br />Taking these three parameters, the Urban Aspirers, or the MIG fall into a category that earns INR 3-10 lakh per annum, needs a dwelling unit of 600-1200 square feet in and whose household expenditure to income ratio is less than 5.1 – the dictionary definition of Affordable Housing.<br /><br />A more commonly accepted rationale for affordability is the household expenses to gross income ratio. In the United States, for example, housing affordability means housing costs that do not exceed 30 per cent of a household’s gross income, while in Canada the figure has changed with times – it went from 20 per cent to 25 per cent in the 1950s and finally now at 30pe4 cent. For India, this number is 40per cent.<br /><br />Although, recent data suggest that housing affordability has declined (to 4.6 in FY 11-12, from 22 in ‘94-95), the serious lack of available housing essentially means the prices of dwelling units coming down will take time. <br /><br />The concept of “Affordable Housing” in contrast is applicable across “ALL” income categories. The ‘affordability’ of a household in a given location is an interactive outcome of house price, income, spending & saving behavior. It is recognized that “affordability” is relative to geographical area, time & income category.<br /><br />The Central government tried to define affordable housing by setting up a committee under HDFC chairman Deepak Parekh. The committee has defined affordable housing in two parameters: The minimum area each category of income should be living in and how much should he be paying for that area.<br /><br />Say for example, a 300 sq ft flat is a decent livable area for a driver working in a government or private firm. Then, he should get it at 5 times his annual income which is defined as Rs 60,000 per annum. So he should get a 300 sq ft flat worth Rs 3 lakh somewhere near his area of work. If he cannot get houses at that rate, then we have a problem that the market is not producing products that people could pay.<br /><br />Suburbs like Boisar and Vasind near Mumbai, Talegaon near Pune are areas where developers are focusing, given the availability of land and access to city centres thanks to a growing network of public transport.<br /><br />Urban Aspirers, who typically fall in the middle income category, are set to play a major role in the demand for affordable housing in the coming few years. What this translates into is a housing shortfall of roughly 35 million plus dwelling units in Urban India.<br /><br />With their numbers set to rise to 23 per cent of the population in less than a decade, Urban Aspirers will rule the roost. The BCG suggests Urban Aspirers are going to lead the India Consumption Story in the current decade, with current consumption pattern suggesting that Urban Aspirers account 11 per cent of India’s total consumption ($109 billion out of $991 billion) and rising three times to $358 billion by 2020.<br /><br />With Middle Class India increasing in size over the next decade, there will be many, many more Duggals added to the list. A large number will be looking for a permanent roof over their heads. While the reel-life Duggals were able to temporarily manage a car, Urban Aspirers will unlikely settle for temporary solutions for housing. What is needed, are millions of such affordable houses for the millions of Duggals out there. Are we up to the challenge?<br /><br />(<em>The author of the article is Brotin Banerjee, MD & CEO, Tata Housing )<br /><br /></em></div>
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