Skip to main content

Urban housing: Pace of PMAY-U sets stage for the achieving $5 trillion goal


By Arjun Kumar, Soumyadip Chattopadhyay*
The COVID-19 pandemic has foregrounded the crucial link between adequate housing, human settlements and peoples’ ability to lead a healthy life. The lockdown induced work from home scenario has also highlighted differential kinds of housing demand and usage. Of late, the emerging densification of Indian cities underscores the need for planned human settlements and sustainable housing in the future, as also highlighted in the recent economic survey through geo-spatial maps.
Following the pandemic outbreak and lessons learnt, while the housing industry as a whole showcases sight of recovery and the housing pricing going north, the issue of affordable housing for the poor and supply of social housing for the vulnerable requires special attention.
In India, about 63.8 per cent of the urban households had their own dwelling units, around 96 percent were living in pucca houses and average floor area of the dwelling unit was about 46 square meters (sqm) during 2018 (NSSO, 2019). The Technical Group on Urban Housing Shortage for the 12th Plan (TG-12), Ministry of Housing and Urban Affairs (MoHUA), estimated the urban housing shortage during 2012-2017 at 187.8 lakh, mostly (around 150 lakh) on account of congestion (Kumar, 2015).
The Pradhan Mantri Awas Yojana Urban (PMAY-U) – a flagship Mission of Government of India was launched in June 2015 to provide affordable housing for all by 2022. PMAY-U seeks to address the housing requirements of all sections of urban poor including homeless population, slum dwellers through four programme verticals.
Under the In-situ Slum Rehabilitation (ISSR) component, slums are redeveloped involving the private developers and slum community. The Affordable Housing in Partnership (AHP) component has the provision for reserving 35 percent of the houses within the project for the poor. The central government provides subsidies (Rs 1 lakh for ISSR and Rs. 1.5 lakh for AHP) coupled with other benefits like Floor Area Ratio (FAR) to incentivize the private developers. Poor households having legal land entitlement are eligible to receive a central government subsidy of Rs. 1.5 lakh under the Beneficiary-led individual house construction/enhancement (BLC) component.
The Credit Linked Subsidy Scheme (CLSS), a central sector scheme, categorizes the beneficiaries on the basis of income and housing units’ size. However, the States/UTs have the flexibility to redefine the annual income and house size criteria as per local needs. The CLSS-I includes economically weaker section (EWS) household with income upto Rs. 3 lakh and housing unit size of 30 sqm and lower income groups (LIG) household with income from Rs. 3-6 lakh and housing unit size of 60 sqm. Middle income groups (MIG) with MIG-I & MIG-II being categorized as having annual household income slabs of Rs. 6-12 lakh and Rs. 12-18 lakh respectively are covered under the CLSS-II vertical.
The central assistance involved in the mission verticals per house are- highest for CLSS (upto Rs. 2.67 lakh), followed by BLC (Rs. 1.5 Lakh), AHP (Rs. 1.5 Lakh), and lowest for ISSR (Rs. 1 lakh). The average cost of per house sanctioned under the mission is around Rs. 5.4 lakh, and it comes out to be Rs. 3.6, 7.4, 6.24 and 10.7 lakh for BLC, AHP, ISSR and CLSS, respectively (Kundu & Kumar, 2017 & Kundu & Kumar, 2020).
Moreover, the Affordable Rental Housing Complexes (ARHCs) scheme has been introduced, as a sub-scheme under the PMAY-U, to arrange rental housing for the urban migrants/ poor.
Apart from the financial benefits, several other structural and technological measures have been devised to facilitate the scheme implementation. A technology sub-mission aims to promote cost effective and modern building materials and construction technologies. Urban land mapping is also being promoted in line with PM Swamitva yojana mission. The Global Housing Technology Challenge – India (GHTC-India) aims to identify and mainstream a basket of innovative housing construction technologies that are sustainable, eco-friendly and disaster-resilient.
MoHUA has also launched the CLSS Awas Portal (CLAP) to monitor and integrate all stakeholders in real time environment. The PMAY-U also integrates Swachh Bharat Mission, Jal Jeevan Mission, etc. Importantly, the PMAY-U promotes the beneficiaries to be women member of the households. Moreover, with the home ownership, formal credit availability based on the same eases the financial burden of housing constructions and future credit availability.

PMAY Progress and Issues

The houses sanctioned during 2015-2022 has demonstrated exponential growth and the progress towards achieving the revised target has been phenomenal, especially in the recent years. As per official reports, 4302 cities have been included in the PMAY-U, with a total of 469 Class-I cities.
As on February 7, 2022, around 114.04 lakh houses have been sanctioned, of which- 93.17 lakh houses has been grounded for construction and 54.55 lakh houses are completed (June 2015 onwards). Around 16 lakh houses are being constructed using new technologies. The total investments in projects stands at around Rs. 7.52 lakh crores, and the central assistance sanctioned is around Rs. 1.87 lakh crore.
Out of the total 114.04 lakh houses sanctioned, among the PMAY-U program verticals, the composition of sanctioned houses was 4.51, 70.70, 21.13, and 17.69 lakhs for ISSR, BLC, AHP, and CLSS respectively[6]. In CLSS, the houses sanctioned under CLSS I (EWS/LIG) and CLSS II (MIG) was 11.54 and 6.15 lakh, respectively. The total interest subsidy released under CLSS was Rs. 42,405 crores, out of which Rs. 29,470 crore was for EWS/LIG and Rs. 12,935 crores for MIG. It demonstrates significant acceleration in sanctions of houses, especially on the account of BLC and AHP verticals.
In terms of number of houses sanctioned, the PMAY-U scheme has performed better compared to the previous centrally sponsored housing schemes. However, the non-completion of those units has seriously hamstrung the scheme’s potential to achieve the goal of slum free cities and housing for all within the stipulated time.

Issues in Urban Housing

Firstly, with only about 4.6 lakh houses sanctioned so far, the ISSR vertical has clearly not kicked off at a pace that was expected. This has been attributed to the problems related to legislative and administrative difficulties in providing land title to slum dwellers, private sector participation, civil society involvement, the absence of agencies coordination dealing with land and such projects at city and state levels, etc.
Secondly, affordability still remains a major concern for those actually suffering from housing inadequacies as the interest rate subvention on housing loan borrowed by the EWS is grossly insufficient to match the housing costs and prices, especially in the bigger Indian cities.
Thirdly, majority of projects for the EWS are inconveniently located and lack access to basic urban services which, in turn, have serious implications for both livability and livelihoods aspects. There is evidence of emergence of ‘new urban slums’ or ‘vertical slums’ in the relocated newer sites and redeveloped premises.
Fourthly, limited access to suitable land has also hamstrung the project implementation. Near absence of proper urban planning coupled with outdated land development regulation has contributed to the inadequate supply of land and high land prices. Convoluted and cost intensive processes of land purchase/land conversion (e.g., acquiring multiple ‘No Objection Certificate’, payment of disparate fees including stamp duty, registration fees, real estate agents’ fees etc.) have only increased the prices of affordable housing.
Fifthly, the private players have not shown enough interests in the PMAY-U verticals. Even the incentives like increasing Floor Space Index (FSI) are hardly useful as FSIs in Indian cities, as compared to other major world cities, remain low and invariant to the increasing housing demand. Also, the private players’ intrinsic purport of equating access to affordable housing to people’ ability to pay practically has excluded majority of the urban poor.
Sixthly, lack of local capacity and technical expertise has led to underutilization of funds under the PMAY-U scheme. Little attempts have been made to adopt modern low-cost technologies for housing construction and to respond to the specific housing needs of the urban poor. Addressing these deep-rooted problems is key to unlock the full potential of the PMAY-U.
Seventhly, in general, the EWS and LIG households remain excluded from the housing market due to lack of access to credit and affordability as they are mainly engaged in the informal sector employment or are self-employed. In this aspect, there has not been much movement from the newly announced ARHC scheme. However, for migrant workers, there was a major push under National Urban Livelihood Mission – Shelter for Urban Homeless (NULM-SUH) for homeless persons, especially during the pandemic.
Eighthly, selection of beneficiaries, legal documentations and allotment of housing units as well as post-project completion, delivery and post-occupancy issues have remained opaque under political manipulations, resulting in exclusion of persons suffering from genuine housing inadequacies.

Affordable Urban Housing and Budget 2022-23

The union budget 2022-23 has given thrust to the cities and the budgetary estimate for MoHUPA over the last year has seen a jump of around 40 percent (Chattopadhyay & Kumar, 2022). The flagship PMAY-U mission has received record high allotment of Rs 28,000 crore in Budget Estimate (BE) for Financial Year (FY) 2022-23. This has been following the incredible success in the affordable housing push and budgetary realization in previous two FYs, also financed from Central Road and Infrastructure Fund (CRIE).
The Actual Expenditure (AE) under PMAY-U for FY 2020-21 was 20,990 Crore (BE was Rs 8,000 crores). During the FY 2021-22, the BE was Rs 8,000 crores which has been revised to whopping Revised Estimates (RE) of Rs 27,000 crores. In terms of number, urban housing for poor has come out to be the biggest thrust and achievement in recent budgets.
For FY 2020-21, the AE for CLSS I and II was Rs 3,750 and 3,000 crores respectively. The BE for CLSS for FY 2021-22 had allocations only for CLSS I, which was Rs 1,000 crore, however, the RE stood at Rs 12,000 crore. Subsequently, there has been discontinuation of the CLSS in FY 2022-23 and no provision has been made under the same.
For other three verticals of PMAY-U, which are centrally sponsored schemes, the RE for FY 2021-22 is Rs 15,000 and the BE for FY 2022-23 has been estimated at Rs 28,000. This is indicative of renewed government focus on housing for the poor targets to be met by 2022.
Apart from financial provisions, this year’s budget entails some key structural reforms which, if implemented properly, would address some of the deep-rooted problems in the housing sector. Acknowledging the importance of efficient uses of land resources, provisions for Unique Land Parcel Identification Number for facilitating IT-based management of records; facility for transliteration of land records across any of the Schedule VIII languages; adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ for standardizing registration process of deeds & documents from anywhere; and intergovernmental coordination for reduction of time required for all land and construction related approvals are expected to infuse the much needed transparency in the land record management.
This, in turn, would smoothen up the supply of affordable land at suitable locations. Moreover, the provisions for modernization of building byelaws, town-planning schemes and transit-oriented development (TOD), energy efficiency in buildings and infrastructure could incentivize the private sector to provide affordable housing that are responsive the needs and priorities of the urban poor.
The proposal of PM Gati Shakti National Master Plan, push for AatmaNirbhar Bharat, and the National Infrastructure Pipeline (NIP), and initiatives for shortening the distance between peoples’ living and workplaces are likely to better integrate the people with their cities. Encouragement for leveraging of central government assistance under mass transit schemes and Atal Mission For Rejuvenation And Urban Transformation (AMRUT) scheme is a welcome step to improve urban mobility. Similarly, integration of other schemes for provisioning of urban basic services with the PMAY-U can address the service deficiency problems in affordable housing projects.
Importantly, the announcements of a high-level committee of reputed urban experts and designating five institutions as centres of excellence with an allocation of Rs 250 crore each for “India-specific urban knowledge” are expected to address the problem of low capacity and capability and to help the cities in formulating actionable policies.
Although the ARHC scheme was announced in 2020 amidst the migrant crisis during lockdown, this scheme did not see much push in the last two year’s budget. Given the importance of rental housing in the affordable housing framework, such budgetary indifference is a cause for concern. Recently, the Model Tenancy Act, 2021 has been passed to strengthen the rental housing market through provisions for greater transparency in rental arrangements, minimizing the incidence of litigations and disputes and speedy conflict resolution.
Similarly, the Real Estate (Regulation and Development) Act, 2016 (RERA) came into effect on May, 2017 to ensure and encourage greater transparency, citizen centricity, accountability and financial discipline in the real estate sector. Streamlining the proper implementation of these Acts as well as instituting grievance redressal mechanism is urgently needed to create an effective housing marketplace including the rental options for augmenting adequate supply of affordable and quality housing.
Further, this year’s budget has emphasized on collaborating with the financial sector regulators to ease the process of access to capital along with reduction in cost of intermediation for the PMAY-U scheme beneficiaries and to infuse affordable housing supply.

The Way Forward

In essence, moving beyond the housing numbers and yearly budgetary allocations, it is imperative to understand actual needs of the urban housing beneficiaries and to address the ground level bottlenecks. The government has showcased seriousness in achieving overall targets for housing shortage owing to human, social, economic and political considerations and the contribution of urbanization towards overall development. The total benefit accruing to the country attributable to PMAY-U would, however, depend not just on the total number of units constructed but on the nature of the verticals as well as the institutional structures through which this is achieved and have impact on the lives of urban citizens.
The central and state level authorities must take immediate steps to overcome the legislative hindrances and bureaucratic delays and to upscale the interventions with regard to slums redevelopment and informal settlements and affordable housing.
There is an urgent need for renewed thrust and upward revision of the subsidy amount provided, which is abysmally low under the ISSR vertical. Greater thrust is also required in the area of planned supply of affordable ownership housing by private sector and providing affordable and adequate planned non-ownership (rental) housing, workers housing, hostels, dormitories and so on, especially for migrant and marginalized families and citizens in cities.
Overall, the complex and challenging issues, pertaining to redevelopment of slums and unplanned settlement (eg. land, community mobilization, private sector participation, identification of beneficiaries) and planned supply of affordable housing requires thrust from all the stakeholders. For this, the active role of state government and urban local bodies as well as communities is of paramount importance, learning from the best practices and bad experiences.
Understandably, the pace and performance of the PMAY-U Mission and its overall success sets the stage for the achieving the goal of $ 5 trillion economy and providing ease of living to each citizen in Indian cities in the future.

References

---
*Respectively: Arjun Kumar (arjun@impriindia.org), Director, IMPRI Impact and Policy Research Institute, New Delhi; Soumyadip Chattopadhyay, Associate Professor of Economics, Visva Bharti University, Santi Niketan and Visiting Senior Fellow at IMPRI

Comments

TRENDING

Zakir Naik tumult, Catholic Church power abuse: will Anwar Ibrahim save Malaysia?

Anwar Ibrahim By Jay Ihsan*  Anwar Ibrahim, a hardcore reformist who took a punch to his eye in 1998 from then inspector-general of police, Rahim Noor, has finally been given the mandate by Malaysians to serve as the nation's 10th prime minister. Anwar knows too well the burden of staying true to both trust and faith the people have in him requires every once of commitment and dedication. The question is will he be apologetic for his transgressions enroute to "rebuilding" Malaysia? In his overzealousness to get the job done, Anwar, 75, needs to safeguard every bit of gumption to address prickling issues plaguing the safety of the nation especially those involving communal sensitivities. For one, dare Anwar get rid of terrorist hate preacher and fugitive Zakir Naik for inciting religious unrest in Malaysia? In November 2016, India’s counter-terrorism agency filed an official complaint against Naik, holding him responsible for promoting religious hatred and unlawful activi

Although sporting genius, Wasim Akram was mascot of cricket globalisation era

By Harsh Thakor*  Since Independence India and Pakistan produced a galaxy of cricketing stars that permeated cricketing artistry of legendary heights. Amongst this bunch.Wasim Akram manifested pure cricketing genius to the greatest height.I speculate how India’s fortunes would have changed had partition not taken place and Wasim playing for India. Wasim Akram explored realms untranscended in bowling wizardry, like a painter devising new art forms or a scientist experimenting. He simply re-defined the art of reverse swing, reversing the ball in and out. There were bowlers quicker, more accurate and with better records, but none equalled Wasim in an all-round package. He was more lethal with a new and old ball than any fast bowler ever. Wasim could produce balls that were surreal, with his reverse swing, defying laws of bio mechanics He was simply the epitome of versatility, possessing a repertoire of six different deliveries within an over itself, disguising deliveries in the manner of

Galileo-Catholic church affair: must history repeat at Malaysia’s St Francis Xavier church?

By Jay Ihsan*  Christianity is the enemy of liberation and civilization -August Bebel Christianity taught men that love is worth more than intelligence -Jacques Maritain Real Christianity can be summed up in two commands: Love God and love people. - Joyce Meyer Pious XI was too neutral to mention the gas chambers; decent people like my own family were turned into devils by crude Christianity - Lionel Blue Religious doctrines cannot escape the liberty of thoughts and expression. To each their own, so it is said. From all things nice to all things that make one cringe - religion is polarised and in this regard, Christianity has over time faced the wrath of bigotry espoused by those "bequeathed" to protect it. Take Pope Francis for example. He had a secret meeting with giant pharma Pfizer chief executive officer Albert Bourla last year while the world struggled to make sense of the word "lockdown" and suffer adverse effects of the Corona virus vaccines produced by Pfiz

Qatar World Cup has a strong Bangladesh connection: stadium construction, t-shirts

By Mashrur Siddique Bhuiyan*  The FIFA World Cup fever has unquestionably cut through the minds of mass people all over the world. Stadiums in Qatar are buzzing with football fans and athletes representing their countries at the “Greatest Show on Earth". The magic of the FIFA World Cup is so enormous that even being unable to participate does not matter much to the fans who support different nations. This is one of the highest viewed events in the world, with the 2018 event viewed by about 3.6 billion people worldwide. But this crowd is not aware of the contribution of migrant workers who helped build the very stadiums where the matches are playing in. Qatar won the bid in 2010 to host the FIFA World Cup 2022, which got the oxymoron of celebration and controversy. This also created the potential for Qatar to Showcase its monumental economic achievements and unique culture on the global stage. The motto for Qatar’s bid team in 2010 was ‘Expect Amazing’ and migrant workers across th

Floods: As ax falls on most vulnerable, Pak seeks debt cancellation, climate justice

By Tanupriya Singh  Even as the floodwaters have receded, the people of Pakistan are still trying to grapple with the death and devastation the floods have left in their wake. The floods that swept across the country between June and September have killed more than 1,700 people, injured more than 12,800, and displaced millions as of November 18. The scale of the destruction in Pakistan was still making itself apparent as the world headed to the United Nations climate conference COP27 in Sharm el-Sheikh, Egypt, in November.  Pakistan was one of two countries invited to co-chair the summit. It also served as chair of the Group of 77 (G77) and China for 2022, playing a critical role in ensuring that the establishment of a loss and damage fund was finally on the summit’s agenda, after decades of resistance by the Global North. “The dystopia has already come to our doorstep,” Pakistan’s Minister for Climate Change Sherry Rehman told Reuters. By the first week of September, pleas for h

A classic, 'Gandhi' ignores merciless cruelty unleashed on militant freedom fighters

By Harsh Thakor  The movie ‘Gandhi’ produced by Richard Attenborough, which was released 40 years ago on November 30th, 1982, was classic in it's own right. Ironical that it took an Englishman to embark upon the making of a film on this legendary figure. I can't visualize a better pictorial portrayal of Gandhi's life or an actor getting in the skin of the character an exuding the mannerisms as actor Ben Kingsley. Episodes are crafted and grafted surgically, illustrating how Gandhi wove fragmented bits into a cohesive force, to confront he British empire. Most boldly the movie unfolds how British colonialism subjugated the Indian people to barbaric cruelty. With great mastery the cinematography captures the vast Indian landscapes and essence of livelihood of Indians under colonial rule. The movie most illustratively shows the crystallisation of anti-colonial fervour from the embryonic stage and how it fermented into an integrated movement. In a most subtle manner it illustr

Implementing misleading govt order to pollute Hyderabad's 100 year old reservoirs

Senior activists* represent to the Telangana Governor on GO Ms 69 dated 12.4.2022 issued by the Municipal Administration and Urban Development (MA&UD), Government of Telangana: ‘...restrictions imposed under para 3 of said GO Ms 111 dated 8.3.1996 are removed...’: *** Ref: GO Ms 111 dated 8.3.1996: ‘To prohibit polluting industries, major hotels, residential colonies or other establishments that generate pollution in the catchment of the lakes upto 10kms from full tank level as per list in Annexure-I...’ We come to your office with grievance that GO Ms 69 dated 12.4.2022 issued by Government of Telangana not only contains false information issued ‘By Order and in the name of the Governor of Telangana’ , without any scientific or expert reports, but also that implementation of the said GO is detrimental and can be catastrophic to the Hyderabad city as two 100 year old reservoirs Osman Sagar and Himayath Sagar were constructed as dams on river Moosa and river Esa, with the first and

Bangladesh's ties with Myanmar, Nepal, China need connectivity with India's NE states

By Samara Ashrat*  On 26th November, India's External Affairs Minister S Jaishankar said that India is trying to improve trade and connectivity with Bangladesh and Myanmar on his two-day visit to India's Northeast region. He emphasized the importance of linking Northeastern India to the rest of the nation and reiterated Delhi is working to improve connectivity and infrastructure in the region. By taking the G20 presidency India will try to showcase the true spirit of the Northeast to the world, with its tourism benefits. But, the umbilical cord between the Indian mainland and North Eastern Region is Chicken's Neck or Siliguri corridor which brings Bangladesh into the Indian equation of northeastern development. Not only that, Bangladesh has very close relations with West Bengal, Assam, Meghalaya, and Tripura in terms of language, culture, and history. These factors make Bangladesh an inextricable element of the development of the northeastern states. Tourism Sector and Con

25 years of CHT peace accord: A glorious chapter of conflict resolution in Bangladesh

By Kamal Uddin Mazumder*  Conflicts between the Bangladesh army and Shanti Bahini persisted in the Chittagong Hill Tracts for more than two decades. On December 2, 1997, Parbatya Chattagram Jana Samhati Samiti (PCJSS) and the Bangladeshi government signed the CHT Accord, putting an end to the violent armed conflict and improving the life of a lot of the people there. It has been made possible through just seven meetings under the worthy leadership of Sheikh Hasina. The historic peace agreement created an atmosphere of peace in the mountainous region. An atmosphere of peace has been established by ending the armed conflict. The geographical features and ethnic diversity of Chittagong Hill Tracts (CHT) are distinctive. The 13,184 square kilometer territory is bordered by Myanmar and the Indian state of Mizoram on the East and Tripura on the North. With its 1.6 million people, it entails great importance to Bangladesh for its geopolitical location. Due to the conflict-prone Northeast Indi

Film on evidence of viability of in situ communitarian urban water management

By Rahul Banerjee  Over the past few years it has become increasingly clear that centralised urban water management in India is in deep crisis. Water supply is both inadequate and extremely costly, water harvesting and recharging and used water treatment and reuse are mostly absent and storm water management is a disaster. Under the circumstances, the only viable solution is communitarian in situ water management and this is what has been proposed in the latest guidelines of both the Atal Mission for Rejuvenation and Urban Transformation and the Swacch Bharat Mission. Our NGO, Mahila Jagat Lihaaz Samiti , has not only implemented communitarian in situ water management but has also carried out research to provide evidence of the unviability of centralised water management and the suitability of the former. Here is a film based on a detailed research that I did on urban water management in Chhattisgarh for the National Institute of Urban Affairs, New Delhi, that succinctly critiques cen