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LATEST NEWS UPDATES | One year of housing for all: At this pace, it’s indeed a dream by 2022 -Shalini Nair

One year of housing for all: At this pace, it’s indeed a dream by 2022 -Shalini Nair

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published Published on Jul 1, 2016   modified Modified on Jul 1, 2016
-The Indian Express

Housing activists say that a heavy reliance on private sector is the prime reason for poor pace of implementation of the PMAY

New Delhi: A year after Prime Minister Narendra Modi launched the Pradhan Mantri Awas Yojana (PMAY) with the stated purpose of constructing two crore houses for the urban poor by 2022—at the rate of 30 lakh houses per year— merely 1,623 houses have been constructed so far.

The number of houses sanctioned, even on paper, stands at just seven lakh as on June 25, 2016, the first anniversary of the PMAY that goes by the slogan ‘Housing for All by 2022’. Of the completed houses, 718 have been built in Chhattisgarh, 823 in Gujarat, both under ‘affordable housing in partnership’ which is one of the four verticals of the scheme. The sub-scheme gives a subsidy of Rs 1.50 lakh per dwelling unit to builders, government or para-statal agencies that reserve at least 35 per cent of their project for constructing 250 sq ft homes for the economically weaker sections (EWS). Another 82 houses have been built in Tamil Nadu under the Beneficiary-led construction scheme under which Rs 1.50 lakh per unit is given to needy beneficiaries who want to construct a new house or upgrade their existing one.

About 7,700 people have taken the benefit of the third component: credit-linked subsidy sub-component. Under this, interest subsidy of 6.5 per cent is offered by the government for home loans of up to Rs 6 lakh for those from EWS and low income group (LIG) families.

The worst performance has been in the sub-component of in-situ redevelopment of slums under which not a single house has been built till date. The model relies heavily on builders taking up redevelopment of slum clusters wherein in return of rehabilitating the slum residents on part of the land, they are allowed to use the remaining land, private or public, for constructing houses for sale in the market. The scheme is based on existing slum redevelopment models of Gujarat and Mumbai. Of the 51 sanctioned projects under the sub-scheme, 45 are in Gujarat with rarely any takers from elsewhere.

According to Chandana Das, housing activist from the Youth for Unity and Voluntary Action (YUVA), the slum component is based on the Mumbai’s SRA model which itself has not been very successful. In Mumbai, the SRA scheme has been able to house merely 1 lakh slum dwellers in 15 years as against the target of 8 lakh in five years with only slums in prime pockets being taken up by private developers who capitalised on a majority of the freed land.

Housing activists blame the laggardly implementation of the PMAY on its heavy reliance on the private sector. In comparison, under the Rajiv Awas Yojana, which was scrapped by the NDA government, 50 to 75 per cent of the project cost was borne by the Centre, the remaining by the state government and only a minimal amount by the beneficiary himself.

“The central funding of Rs 1 to 1.5 lakh per unit is grossly inadequate for constructing houses in metros such as Mumbai and Delhi and even in many smaller towns. States have their own priorities and may not allocate enough funds in their budget for this scheme. Most of the sub-schemes depend on private builders who are not interested in constructing houses for the poor while under the beneficiary-led construction, only those urban poor who have a claim on the land can get funding. Rarely is this the case,” said Das. She added that unlike RAY, PMAY lacks a rental component and stresses little on small upgradation and heavily on builder-led redevelopment.

It was initially proposed that PMAY would have a rental housing component with an outlay of Rs 6,000 crore mainly aimed at migrant populations and homeless who can’t ever afford to buy a house. However, officials said that with the PM’s emphasis on providing ownership-based houses for all, the Ministry of Housing and Urban Poverty Alleviation (HUPA) decided to drop the rental component just before the launch of the scheme. A 2013 report by a HUPA rental housing task force said that since the poor do not have accumulated savings to buy a house, the only alternative for them is affordable rental housing.

The figure of 20 million housing requirement, as stated under PMAY, is based on the estimated shortage of 18.7 million dwelling units in the 12th five-year plan. Of this, 90 per cent of the shortage is in category of EWS and LIG. “Of the estimated shortage, only 6 to 7 million units are required to be constructed anew. The rest of the shortage is mostly due to the congestion factor where slum residents require to upgrade their existing homes to accommodate their expanding families,” said development economist Amitabh Kundu. He added that the cost of constructing EWS-LIG houses is up to 8 lakh in metros. “Even after an interest subsidy under the credit link subsidy scheme, the EMI works out to Rs 3,000 per month. This is not affordable for the poor,” said Kundu.

Among the larger states, Uttar Pradesh and Haryana have not even started off PMAY on ground. Most of the northeastern states and all Union territories have a similarly poor show. “Many states have not shown much interest due to political reasons while many others are reluctant to pitch in their share,” said a Union ministry official. Even considering the minimal funding of Rs 1 to 1.5 lakh per unit and a set target of 30 lakh houses a year, the annual budgetary provision required for the programme is Rs 40,000 crore. As against this the allocation for PMAY for 2016-17 is a mere Rs 5,000 crore.

The Indian Express, 25 June, 2016, http://indianexpress.com/article/business/economy/one-year-of-housing-for-all-pradhan-mantri-awas-yojana-a-dream-by-2022-2874246/


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