Nine months on, there has been no sign of any updated guidelines, amended directives, or recommended changes to speed up the ‘housing for all’ initiative, which managed to build just 63 lakh homes of the 1.88 crore it aimed to complete by December 2022.

There is a lot riding on the success of this flagship scheme, which is expected to not just improve the living conditions of millions in India, but also promote overall economic growth and development, and boost the prospects of ruling political parties as the nation prepares to elect its next government in April-May 2024.

PMAY aims to provide affordable mortgage loans to economically weaker sections (EWS), lower-income groups (LIG), and middle-income groups (MIG) in urban and rural areas. Through a combination of central and state government funding, as well as private-sector participation, eligible beneficiaries are provided low-cost home loans, direct financial assistance for building houses, credit-linked subsidies for the middle-income group and in the case of slum dwellers, in-situ rehabilitation.

But, there are many slips between the cup and the lip.

Take for instance Devika (name changed), (63), near Sanand. She started building her home before COVID-19 and is left with an incomplete home and a mountain of debt. After receiving the first two PMAY instalments, she ran out of funds to complete the house to the level required for the next instalment. In 2019, she borrowed from a loan shark to make ends meet. Then the pandemic struck and she could not purchase enough to take the house up to the roof level as material and transportation costs skyrocketed.

Devika and thousands more like her are stuck with incomplete, or ‘grounded’ houses, as the material costs estimated in the total provided to beneficiaries have remained constant since the scheme's inception in 2015! Fixing this lacuna is paramount if the government is serious about achieving its aim by 2024.

For instance, even though the Ministry of Housing and Urban Affairs (MoHUA) had sanctioned about 1.2 crore houses by the end of 2022, 1.05 crore houses remained under construction.

Digging Deep

The PMAY has been split into four verticals, tailored to suit the needs of individuals based on their geographical conditions, topography, economic situation, availability of land and infrastructure, among others.

Beneficiary-Led Construction (BLC): Under this category, persons with an annual income of up to Rs 3 lakh can get financial assistance to build their homes. However, they will need to have their own land. By the end of 2022, at 60 percent, the maximum number of projects were sanctioned under this category.

Credit-Led Subsidy Scheme (CLSS): For EWS and LIG, this offered affordable housing loans at 6.5 percent interest rate, for up to 20 years or the loan's duration, whichever was shorter. The subsidy is applied to loans up to Rs 6 lakh, with any additional amount incurring non-subsidised rates. CLSS accounted for 20 percent of the total demand.

Affordable Housing in Partnership (AHP): Through a dynamic public-private partnerships (PPP) model, AHP provided an array of financial and floor space index benefits varying from state to state. It catered to 17 percent of the total demand.

In-Situ Slum Rehabilitation (ISSR): This component of PMAY was deemed transformational as it aimed at converting slum pockets into organized plotted developments with vertical housing. This innovative approach also relied on PPP. However, it accounted for only 3 percent of the total demand.

Ground Realities

A variety of reasons stall projects, ranging from land conflicts between family members of some beneficiaries to financial constraints to even the demise of a beneficiary in the BLC category. Delays in obtaining a death certificate and an affidavit meant the family, in this specific case, had to live in a half-demolished and half-made home for months before construction resumed.

Ravi Sharma (name changed), an AHP beneficiary in Jharkhand, told The Secretariat that two years after the allotment and monthly loan repayments, his handover has been postponed “due to unfinished infrastructure on site,” including storm water drains, internal roads, and electrical connections.

Infrastructure provision remains a critical concern in the parliamentary committee's findings too. Sharma now has to repay his loan and also pay for his rented accommodation elsewhere.

It is indeed an onerous task for the central and state governments when it comes to implementation. Hurdles like resistance to multi-storeyed housing, loan disputes, court orders, permanent migration, and unwillingness to relocate hinder progress.

On the structural front, the absence of any demand assessment for about a decade, sluggish grounding and implementation timelines, heavy financial burden on beneficiaries, lack of basic amenities, and a paltry number of sanctioned in-situ slum redevelopments, continue to act as a drag.

Take for example the in-situ rehabilitation project in northeast Delhi. Sameera (name changed), 63, who previously worked as a tailor on the ground floor has now been assigned a flat on the top floor of a three-storeyed (G+3) building, without an elevator. For this elderly widow, the shift led to a fall in her walk-in customers, affecting her livelihood. Many potters and livestock owners complain of the same besides health issues in such stacked dwellings supplied to slum inhabitants under the ISSR vertical of PMAY.

Housing For All

In 2015, the government launched an ambitious scheme to provide all-weather, pucca houses to millions of urban poor. PMAY-Urban was meant to address the chronic housing shortage by 2022, when India completed 75 years of independence. At the time of the PMAY launch, the housing shortage for the urban poor – mainly those who come under the EWS and LIG – was estimated by the Technical Group (TG-12) to be around 1.88 crore units.

However, as the deadline neared, it became apparent that PMAY would miss its target by a wide margin. By December 2022, the Ministry of Housing and Urban Affairs (MoHUA) had managed to fill just 30 percent of the shortage estimated by TG-12. The situation in the northeastern states was bleaker due to various geographic and economic reasons, a housing ministry official, who deposed before the parliamentary committee chaired by Rajiv Ranjan Singh, said.

He also blamed external factors like the COVID-19 pandemic, which constrained financial contributions by state governments, and structural deficiencies for inefficiency in PMAY implementation.

It became clear that more time was needed to meet the target. In August 2022, the government extended the deadline to December 2024, to complete the houses already sanctioned till March 31, 2022. The housing ministry said the scheme was extended solely for completion of the sanctioned houses and no additional houses will be approved during this period. The government also earmarked Rs 46,000 crore, about 37 percent of the ministry’s total budget, for PMAY in the 2022-23 federal budget. And this year, Finance Minister Nirmala Sitharaman increased the 2023-24 outlay further by a sharp 66 percent to Rs 79,000 crore. This reaffirmed the government’s commitment to PMAY, but it appears to be inadequate.

When asked by the standing committee whether the ministry undertook any independent study recently to estimate the number of urban poor and their housing needs, the ministry representative said that no study had been done after the TG-12's estimation of housing shortage for 2012-17.

Brick By Brick

In March, the parliamentary standing committee had given a series of recommendations to make the scheme efficient. Apart from more infusion of central funds to make affordable homes a reality, it has proposed stricter deadlines to fast-track pending projects, accounting for geographic, economic, or pandemic challenges.

The committee emphasized that affordable housing should not be merely about addressing housing needs, but should encompass infrastructure development, a facet currently lacking in all four verticals of PMAY. Another key recommendation was the need for data on slum de-notification and the active involvement of lawmakers.

Besides improving the coordination between various agencies and stakeholders, the government needs to raise private sector participation by providing tax breaks, allocating land, and other benefits. Moreover, by leveraging technology and ensuring transparency, it is necessary to ensure that the benefits of the scheme reach the intended beneficiaries and the quality of the houses constructed is of a high standard.

The journey towards affordable housing in India is indeed complex. Hence it is imperative to target tangible outcomes to transform millions of lives by focusing on more effective, efficient, and sustainable practices.