By Tushar Singh
In 2015, the central government launched the Pradhan Mantri Awas Yojana (PMAY) to provide housing for the Economically Weaker Sections (EWS) and Low Income Group (LIG) of the society by 2022. In 2017, the government decided to provide Housing for All by including even the Middle Income Group (MIG) under the ambit of the scheme. For an ambitiously developing country like India, it makes obvious sense to provide pucca houses with water facility, sanitation and electricity supply round-the-clock to the traditionally poorer (or not rich) sections of the society. The table below illustrates the ambit of the scheme:
| Category | Annual Income | Amount of loan covered through the subsidy on interest | Subsidy on interest |
| EWS | Up to 3 lakh | 6 lakh | 6.5% |
| LIG | 3-6 lakh | 6 lakh | 6.5% |
| MIG-I | 6-12 lakh | 9 lakh | 4% |
| MIG-II | 12-18 lakh | 12 lakh | 3% |
Therefore, it plans to give a credit-linked subsidy to weaker and mid-income sections on loans taken for new construction or renovation of existing homes. For those in the lower and mid-income groups, the PMAY reduces the cost of acquiring a home by ?1lakh to ?2.3 lakh. Its end goal is to provide homes to 18 million households in urban India and nearly 30 million households in rural India. The youth joining the labour force with incomes less than 18 lakh can also avail this scheme. Another misconception is that PMAY provides small houses only. You can take a loan of 1 crore to buy a bigger house as well, but the PMAY will cover the interest on loan up to 12 lakh only. If not anything else, construction of 12 crore houses will boost employment and GDP of the country and stimulate the construction sector.
Conflicting Narratives
Notwithstanding its good intentions, PMAY still faces the prospect of encountering a number of hurdles during its implementation (as is the case with all government schemes). While Union Minister of State with Independent Charge in the Ministry of Housing and Urban Affairs, Hardeep Singh Suri has said that the government would meet its target of building 11 million homes much before 2022, PMAY (urban) has only met 8% of its target till now. On the positive side, PMAY (rural) is on track to meet its target of delivering one crore houses by 2019. On the negative side, PMAY has used just 21 percent of the funds allocated to it. Simultaneously, 2017 saw a forceful eviction of more than 2.6 lakh people across urban and rural India, including the homeless, according to a recent report by the Housing and Land Rights Network India (HLRN). This means nearly 150 homes were being destroyed every day. The forceful evictions in 2017 were more than those in 2016. Therefore, on one hand, we see good progress being made by the PMAY; we also see many lags and parallel issues affecting the implementation process.
PMAY varies with states
Different states have co-operated on different levels with the centre on this scheme. Uttar Pradesh is leading the way by meeting 61% of rural housing targets, followed by Madhya Pradesh (44%) and Chhattisgarh (43 percent). However, Telangana has not built any houses and nine states and six union territories have rates under one percent. Tamil Nadu, Assam and Gujarat are under 10 percent completion.
Bihar governments ban on sand mining has affected the construction sector. Sand prices have doubled and are at an all-time high. Out of the targeted 11 lakh houses which were supposed to be completed by now, only 8000 have been built.
Recently, Chandigarhs housing board (CHB) accepted only 444 applicants out of 1.27 lakh applicants for a dwelling unit. However, the centre has asked the CHB to reconsider the huge number of rejected applicants, who were not selected primarily on technical grounds of either not following proper procedure or not meeting the eligibility criteria.
Data from Odisha shows that the scheme has not found much admiration from the middle class, while a slum redevelopment project in Margao is facing hurdles because it is a part of Community Land, which cannot be regularised. Kerala, meanwhile, has changed the funding structure of PMAY by merging it with its Mission LIFE (Livelihood Inclusion and Financial Empowerment) plan.
Hurdles ahead!
PMAY is ambitious, but is it achievable? In its first two years, 1 lakh new houses were built. The current shortage is of 12 million houses. If you calculate the same, it is very unlikely that we will reach the 12 million target by 2022. Therefore, the government should focus on in-situ construction developing existing household, especially slums. The government has made efforts towards this by providing Transfer of Development Rights (TDR) to incentivise developers to in-situ rehabilitate slums. This has proven to be effective in Mumbai and Ahmedabad, but its feasibility is yet to be tested in smaller cities.
The next problem is of undocumented property rights. PMAY requires property documents as a proof to avail benefits of individual home enhancement. Many people live in ancestral homes where ownership belongs to their dead grandparents. Slum dwellers are unlikely to have title documents. To complicate things further, land records are governed by the states revenue department, while housing is a separate agency, which becomes a bureaucratic hurdle. Also, there are approximately one crore vacant houses that are not rented. This unrealised potential is not being tapped because most owners prefer to leave their houses vacant, using them only during occasional vacations.
Corruption and unwillingness are the villains
On top of this are middlemen and the corruption which they bring. A recent corruption case in Latehar, Jharkhand during the implementation of PMAY is evidence of how bureaucracy can play spoilsport. Whats more is that land is a state subject. States have to enter into an MoU with the centre and identify the land that can be put up for development. One can only wonder how Mamata Banerjee, who didnt allow a Swachh Bharat survey in West Bengal, would be co-operating with a Narendra Modi scheme.
The willingness of private developers to work on low-income households which do not bring as many profits as luxurious housing also remains a question mark. Therefore, PMAY may have solved the problem of demand but to implement it, the government needs to tackle the problem of supply.
Holding a positive view
However, 2022 is not 2019. We have more than four years to go. We have a dedicated government at the centre, and it is finally for the first time in history that housing has become such an important issue for a government in Delhi. We should hold our judgments keeping in view that housing projects take 18-24 months to complete. We can expect that in the financial year 2018-19, the pace of PMAY (U) will pick up quite significantly, as an Urban Housing Ministry statement says.