In 2015, the Government of India (GOI) launched the Pradhan Mantri Awas Yojana (PMAY) scheme to provide ‘Housing for All’ by 2022. Nearly seven years have passed since the launch of the scheme and we are way past the initial deadline. At this juncture, it becomes pertinent to understand the housing ecosystem, the role, the scheme's performance and its limitations, and the way forward.
According to the ‘Strategy for New India'’ document by NITI Aayog, India needs 4.2 crore housing units. Three aspects
play a crucial role in the housing shortage in the country:
- Congestion: Households in which married couples or large families do not have separate rooms to live in and require a new house.
- Obsolescence: Houses which are dilapidated and non-serviceable.
- Tenantless: Houses which are unoccupied.
The housing paradox: Demand is not always equal to supply
According to ICRA
, 1.7 lakh unsold housing units are waiting for buyers in the National Capital Region (NCR). As per the Housing and Land Rights Network
, there are 1.5 lakh to 2 lakh homeless people in Delhi alone. The two data figures show a contrast. On one side, there are vacant residences and on the other, there is a problem of inadequate housing for homeless people. The need for a house does not always translate into demand. People who need a residence cannot afford the high-end housing prices from private players who are the suppliers. Therefore, the data points to an immense need for affordable housing.
Under this scheme, the beneficiary identification is as per the Socio-Economic Caste Census 2011 and households having a kutcha house.
The role of the government
Against this backdrop, it becomes crucial for the government to step in and resolve the misalliance deadlock. The government’s role can be categorised into two verticals:
- Ninety-six percent of the people facing a housing shortage are from economically weaker sections and lower economic groups. The government must serve this section directly to ensure ‘affordability’.
- As in many aspects, the government is shifting its role from a provider to a facilitator. Therefore, private sector engagement is one of the crucial factors for the success and implementation of affordable housing projects. The government needs to ensure a conducive ecosystem for private players:
The central government launched a comprehensive Housing for All (HFA) Mission in 2015, which comprises:
- Pradhan Mantri Awas Yojana–Urban (PMAY-U): This was launched in 2015 for urban areas.
- Pradhan Mantri Awas Yojana–Gramin (PMAY-G): This was launched in 2016 for rural areas.
The PMAY-G intervention follows the idea that rural India needs self-built incremental housing. Therefore, PMAY-G provides a subsidy to beneficiaries living in kutcha
and dilapidated dwellings to help them build their pucca
house with basic amenities. For urban India, intervention seeks to address the housing needs of the urban poor, including slum dwellers. Accordingly, PMAY-U envisions slum redevelopment and new greenfield housing in addition to beneficiary-led construction.
Housing for rural India
The PMAY-G aims to provide universal access to decent housing in rural areas by self-built housing. Under this scheme, the beneficiary identification is as per the Socio-Economic Caste Census 2011 and households having a kutcha house. An amount of INR 1.20 lakh in plain areas and a grant of INR 1.30 lakh were granted to the beneficiaries to construct homes in hilly terrain. The scheme also prioritises convergence with other government schemes like Swachh Bharat Abhiyan, MGNREGA, Jal Jeevan Mission, and Deen Dayal Upadhyaya Gram Jyoti Yojana.
The government needs to ensure the prompt release of the state contribution and direct benefit transfer in the case of central funds on the lines of the MGNREGA.
The PMAY-G has a target of completing 2.70 crore new houses with all basic amenities by 2022. According to the government, 1.83 crore (or 68 percent) houses are complete. In other words, 0.87 crore ((or 32 percent))
houses are unfinished or are in different stages of completion. The scheme is lagging in terms of its targets; one reason can be attributed to the COVID-19 pandemic. However, the scheme's performance was poor before the onset of the pandemic.
- Improper execution in a few states: PMAY-G is a centrally sponsored scheme. It has a sharing pattern of 60:40 between the Centre and states in plain areas and 90:10 in hilly areas. Some states delay their contributions which drastically affects progress. In 2020, nine states had delayed the payment of 2,915.21 crores to the beneficiaries. In some states, even central government funds are not released on time. A deficit of 200 crores was reported in the year 2020. The government needs to ensure the prompt release of the state contribution and direct benefit transfer in the case of central funds on the lines of the MGNREGA.
- Access to finance: The amount of 1.2/1.3 lakh in subsidies is insufficient for building a new house in rural areas. A household needs access to sufficient funds from financial institutions to mitigate the funding shortage. The PMAY-G mission guideline provides for INR 70,000 loans through NABARD. Unfortunately, there is not much progress on this front. Even large public sector banks like the State Bank of India (SBI) do not have tailored products for accessing needs and providing funds to the Economically Weaker Sections (EWS). Higher perceived risk and small profit margins prevent banks from creating a product targeting this segment. In this light, it becomes pertinent for the government to step in and ensure a steady supply of finance, which will help the uptake of the scheme. The ‘Housing for All’ dream cannot become a reality unless the finances for the EWS segment are taken care of by government interventions.
The 2020 CAG Audit Report on General, Social & Economic Sectors found a compromise in the quality of houses constructed under PMAY-G.
Limitations to the existing framework
- Exclusion of landless farmers: Owning a plot of land is one of the requirements to qualify as a beneficiary under PMAY-G. According to the 2011 census, India has 144 million landless farmers, most of whom live in rural areas. However, according to PMAY-G-MIS, only 0.26 million were identified as landless. Compared to a decade-old census, the number of landless identified under PMAY-G is abysmal. Out of 0.26 million, the government-sanctioned a mere 0.11 million as beneficiaries. Identification of landless beneficiaries and providing them with the land is the responsibility of the state governments. Except for a few states, most states are ignorant about identifying and providing land to the landless. Until the state government recognizes the landless beneficiaries, the central government does not offer financial assistance. Therefore, a crucial question about the landless rural poor remains unanswered. Moreover, the PMAY-G does not have a separate vertical like PMAY-U to address the housing needs of the landless poor. The landless are the poorest of the poor and belong to marginalized castes. The need of the hour is to acknowledge the limitations of the existing scheme and to devise an intervention solely intended to solve the housing problem of the landless rural population.
- Quality of Housing: CAG's performance audit report of Indira Awaas Yojana (IAY) — IAY was a precursor to PMAY-G — reported low-quality housing as one of the significant drawbacks of the scheme. Similarly, the 2020 CAG Audit Report on General, Social & Economic Sectors found a compromise in the quality of houses constructed under PMAY-G. The issue that was identified eight years ago in IAY is still pertinent in the case of PMAY-G — the responsibility for the construction of the house rests with the beneficiary and there is no proper supervision of the quality. The geo-tagging of dwellings ensures their construction. It is silent on the quality of the houses constructed. The beneficiary is also not aware of the ideal way forward for construction. The ministry has provided ideal prototypes and construction plans. However, there is no mechanism for ensuring its effectiveness on the ground. Therefore, it is recommended that the government strengthens the quality monitoring mechanisms.
- Convergence: The PMAY scheme emphasizes convergence with other government schemes like the construction of toilets under Swachh Bharat Mission, benefits to MGNREGA workers on completion of 90 days, drinking water connection under Jal Jeevan Mission, electricity connection, clean cooking fuel under Ujjwala Yojana. The aim is to provide basic amenities and assistance for house construction. However, various studies and CAG audit reports have pointed out the lack of convergence of schemes. The CAG report on Rajasthan in 2020 revealed a lack of toilets in 49 percent of surveyed households — the construction of a house is complete only after the completion of the toilet. The government not only declared these households complete but also declared the villages ‘Open Defecation Free’.
The PMAY scheme emphasizes convergence with other government schemes like the construction of toilets under Swachh Bharat Mission, benefits to MGNREGA workers on completion of 90 days, drinking water connection under Jal Jeevan Mission, electricity connection, clean cooking fuel under Ujjwala Yojana.
A way forward
PMAY-G is an ambitious programme to achieve ‘Housing for All’ in rural India. State governments should commit to releasing funds on time so that projects get completed without delay. Beneficiaries require support with access to formal financing to fund the beneficiary share. Landless families need to be included in the scheme as they are the most deserving segment that requires government support. There is scope for improving aspects of the quality of housing — one of the ways to achieve this is through better convergence with other central and state schemes.
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