PM Awas Yojana: Time To Re-Imagine India’s Biggest Central Public Housing Scheme

The Secretariat had earlier explored the gaps when PMAY was extended till 2022. In this article, let's focus on what worked and what didn’t, and more importantly, how much we truly understand the outcomes of PMAY. 

So far, the scheme looks like it will be extended. But what have we learned from this central scheme since PM Modi took office? Has the regime adapted and changed anything based on these lessons?

The scheme has remained unchanged in its term, scope, or form, with no adjustments even for inflation. For instance, a beneficiary who got Rs 360,000 under the Beneficiary Led Construction (BLC) vertical based on 2015 rates for cement, sand, and other materials still gets the same amount today. Costs aren't reflecting current economic realities.

Furthermore, the operational guidelines have not been changed since 2021. Despite a parliamentary committee's report, none of the structural or implementation-level issues have been incorporated in PMAY or its operational guidelines. 

Issues surface on three fronts. First, as pointed out, PMAY has not been updated as per the committee's report, the only assessment of the scheme. 

Second, there have been no studies on PMAY. Moreover, a third, and even more critical, issue is the absence of any recent assessment of India's housing shortage since the TG12 report, which was based on Census 2011 and published 12 years ago.

One of the TG12 study's key points is that many houses in informal settlements have basic services and only need repairs to become viable housing. This approach is more efficient in addressing the housing shortage than building and allotting new homes.

TG12 addresses the shortage and the most efficient way to solve it. But PMAY missed the most critical aspect—slum upgradation. More on that later. 

A pre-COVID assessment on housing shortage by the Indian Council for Research on International Economic Relations said India’s housing shortage had increased from 18.78 million to 29 million—an increase of 54 per cent. This shortage is limited to Economically Weaker Sections (EWS) and Low-Income Groups (LIG). 

In the absence of a census, there are many such patchwork data sets attempting to calculate the housing shortage. But there is no indicator to navigate and identify who needs housing and where.

As far as PMAY is concerned in its 11th year, policymakers have little to show for the past decade, except for the parliamentary committee report and one estimate of housing shortage.

What Has Worked, What Hasn't And What Should Change

Under the Pradhan Mantri Awas Yojana - Urban (PMAY-U), there are four verticals. The BLC mode is one; it is designed for people with land and an annual income of up to Rs 3 lakh, and has proven to be the most effective. It accounts for 64.4 per cent of the total PMAI-U sanctions and has the highest completion rate at 27.3 per cent, showing the scheme works when people have land and some financial stability.

Then there's the Affordable Housing in Partnership (AHP) vertical. Here, the government invites private developers to build affordable housing for the EWS and LIG categories. In return, developers get subsidised construction costs or state-specific incentives. Even if it sounds promising, 2023 data shows an occupancy rate of less than 8 per cent for these houses in select states. This is because of poorly chosen locations and a rapid decline or complete lack of infrastructure driving beneficiaries away.

Another vertical is the In-Situ Slum Rehabilitation (ISSR) programme for those without land, tenure, proof of residence, citizenship, or any document to assert their claim. It's supposed to uplift the landless and the most marginalised.

Speaking to The Secretariat, Mrinali Sharma, Programme Manager at Mahila Housing Trust, said that while the BLC vertical is highly sought after, it faces significant challenges in monitoring and implementation. Officials often fail to geotag houses on time or disburse installments for further construction. As a result, many beneficiaries in rural and suburban areas end up trapped in debt.

On ISSR, Sharma noted local governments struggle to find suitable land around slums or relocate residents. She said people are reluctant to choose ISSR because they are placed in transit camps for almost three or four years during construction. These camps often lack basic facilities, and children are vulnerable during the rains. Further, most communities are opposed to vertical housing.

While ISSR is designed to serve the most vulnerable, people clearly do not want to opt for it. Lastly, Sharma highlighted weak social protection, inadequate mapping and upgrading of slum communities, rather than opting for vertical development or possible relocation.

She explained, “First, the government must focus on mapping slum communities accurately and upgrading existing slum pockets. Programmes like Ahmedabad’s slum networking have shown that linking these areas to the city’s infrastructure can make a significant difference. Most slum housing is already liveable and requires repairs, tenure security, and access to basic infrastructure to solve a large part of the problem.”

Repairing and securing tenure for existing slum housing can address a significant chunk of the housing crisis. The state must pivot towards implementing sustainable solutions for the most vulnerable populations.

The BLC's success shows that when beneficiaries have some resources, it thrives. The AHP's poor performance is due to location and infrastructure problems impacting occupancy. The ISSR's struggles highlight the state’s inability to implement housing for the most vulnerable.

Increase In Budget And Outdated Targets

The PMAY-U has only addressed 25.15 per cent of the housing shortage by delivering 80 lakh homes, a  Newslaundry report said. Even if the rest are built by end 2024, it would have addressed just 37 per cent of the need. Some 2.4 crore households will still be without a roof.

Let's not forget one crucial thing: At the end of the first PMAY term in 2022, the government announced a whopping 66 per cent increase in budget for it. They allotted 27 per cent of the Ministry of Housing and Urban Affairs' total budget to extend the scheme. The grand plan was to wipe out the housing shortage calculated in 2012.

But here's the kicker: The 2012 figures are a far cry from the current estimates. Despite the impressive budget boost, aren't we aiming at an outdated target? With the housing landscape evolving constantly, it's crucial to align our goals and efforts with today’s realities. 

Shifting Discourse - Time To Re-Imagine

Despite the lack of data in the housing sector, some patterns reveal the urgent need for a shift in housing policies and practices.

Large-scale slum evictions have displaced communities to the city's margins, far from their original homes. This common strategy has devastating intergenerational impacts, as numerous studies have shown.

Experts have emphasised housing must be connected to transportation and workplaces and cannot exist in isolation. Without this, urban areas face repeated collapses. The Covid-19 pandemic exposed the cracks in our social protection system and underscored the flaws in urban living—housing, work, and transport must be reimagined and reconfigured.

So, what’s the solution? First, we must allow people to remain where they are. The key steps are mapping, recognising, securing tenure, and upgrading existing housing. This approach can significantly address India’s housing shortage.

Another strategy is building rental housing tailored for specific needs. Some states have implemented private rental setups or mandated rental housing for working women, industrial workers, and domestic workers in areas with accessible work and affordable rents.

However, the Affordable Rental Housing Complexes (ARHC) scheme, a rental housing scheme introduced after the pandemic, failed due to poor locations and financial challenges faced by private maintenance and implementation agencies. This initiative seemed more about repurposing unused housing stock with existing proximity and infrastructure issues.

Promising approaches include recognising and upgrading existing housing and mandating rental housing by subsidising construction costs for private companies and offering concessions on electricity and water taxes in prime city locations.

Transit-oriented development (TOD) and land reservation are powerful city-level tools that urban areas should leverage to target zoning for affordable housing. By incorporating these strategies into a city’s master plan, land availability becomes more straightforward. This integration also facilitates the implementation of state or central housing schemes more efficiently.

Meanwhile, reserving land specifically for affordable housing within city master plans ensures sufficient space is allocated for future development. This foresight prevents the common issue of land scarcity that often hampers housing projects. It guarantees that affordable housing is a priority in urban development, rather than an afterthought.

By adopting TOD and land reservation strategies, cities can make significant strides in addressing the housing crisis. These tools not only provide a clear path for development but also ensure housing projects are well-integrated into the urban fabric. 

Centralised policy, financing, and implementation alone cannot solve India’s 25 million-plus housing problem as it stands today. It’s time to embrace innovative, inclusive, and practical solutions for a future where everyone has a place to call home.