the new government were to really implement and execute things which they should be doing and which in their manifestos they profess to do. Definitely anything would be better than doing nothing which has been the case so far," said Banerjee.
For future projects Banerjee plans to build on land which has the basic infrastructure and to secure project approvals before selling any units off-plan - moves that will help protect margins but also make the homes dearer.
Value & Budget Housing Corporation (VBHC), founded by former Citigroup Inc banker Jaithirth Rao and backed by private equity firm Carlyle Group, has also changed its definition of affordable housing to units of 3 million rupees and below from a range of 500,000 to 900,000 rupees in 2009, according to Vivin Mathew, CEO for India's western region.
"Unless the government gives a direct subsidy (to developers) it is very difficult, or unless you make a really small apartment, I do not see how else you can do it under a million rupees," he said.
This is putting low-cost homes out of reach for many price-sensitive buyers, said Madhusudhan Menon, chairman at Micro Housing Finance Corporation (MHFC), which mainly lends to people with an income of between 12,000 to 30,000 rupees a month.
In Gujarat state, where Modi is chief minister and which boasts the largest stock of affordable housing in India, a policy was introduced in January to encourgage developers to build cheap homes.
Still in its infancy, the policy invites developers to build low-cost homes on public land and subsidises part of the building cost. Developers can also build on their own land, where they are allowed to construct taller buildings.
Sanjay Shah, founder and CEO of DBS Communities, which builds low-cost homes in Gujarat, plans to construct 50,000 units by 2020 from 5,000 today.
When Shah started four years ago he capped the maximum price at a million rupees, but scarce land, a lengthy approval process and insufficient cheap capital has forced him to increase it to 1.5 million rupees.
He also failed to meet his margin expectation of 30 to 35 percent, and said that if costs keep rising and there is not enough government support it would soon be 1.75 million rupees.
"We want to have reasonable profits but we are not greedy." ($1 = 59.9950 Indian Rupees)