Context: Of the 3 crore houses, two crore will be constructed under PMAY-Gramin, while 1 crore under PMAY-Urban. The newly formed NDA government in its first cabinet meeting decided to provide assistance to 3 crore additional rural and urban households for the construction of houses, to meet the housing requirements arising out of the increase in the number of eligible families.
What is affordable housing?
- Per the government’s definition, affordable housing properties are those with an area not more than 60 sq.m, with the price capped at ₹45 lakh.
- Government benchmark established in 2008 defines housing as affordable if monthly payments do not exceed 30% of a household's gross income.
India’s present housing scenario:
- According to a Government of India report in 2012, an estimated 18.78 million more houses were required to cater to the housing demand in the country.
- Post this, a study by the Indian Council for Research on International Economic Relations (ICRIER) in 2020 found that India’s urban housing shortage rose by 54% from 2012 to become 29 million in 2018.
Issues and challenges:
- Irrational method: The expenditure method overlooks critical factors such as housing price fluctuations and the limited disposable income among lower-income brackets.
- Under estimation of crisis: With an estimated shortfall of 18.78 million households needing housing, according to the technical group on urban housing shortage, and independent studies indicate a demand for 29 to 50 million homes.
- Decline in selling: Share of affordable housing in overall sales has witnessed a substantial decline which not only has impacted the poor but also the real estate sector as a whole.
- Increase in slums: The rural population that migrates to urban areas are not finding housing they can afford. Hence, there is an increased number of slums, informal settlements and shadow rental market.
- Housing has become an investment: As per 2011 census, 17% of urban population live in slums. There was a shortage of 18.78 million homes between
2012-2017. As per the Economic survey there are 11 million vacant homes. The question that needs answer for is, why there is a shortage of houses while there are vacant homes. The situation has raised since homes have been built and sold to buyers who consider housing as an investment. Homes that are been bought from the real estate companies are neither self-occupied nor put on rental market. They are being kept vacant by the new owners to be sold later for a profit.
What needs to be done?
- Revamping of criteria taking into account the factors like regional price variations, fluctuations in rent, disposable income variation etc.
- Reducing the interest rates: One of the most concerning consequences of the rising interest rates is that homebuyers’ EMI payments are primarily going towards interest rather than the principal amount.
- Educate the weaker sections: Educate the low income groups, the weaker sections of society and the middle income groups about the financial schemes and the support given by the government.
- Incentivize builders: In order to encourage developers and builders (Bhiwadi) to invest in this initiative, any form of government tax, and fees applied on this tax should be removed.
Pradhan Mantri Awas yojana
The Standing Committee on Housing and Urban Affairs (Chair: Mr. Rajiv Ranjan Singh) submitted its report on ‘Evaluation of Implementation of Pradhan Mantri Awas Yojana (Urban).
PMAY-URBAN:
- Launched in: 2015
- Nodal ministry: Ministry of Housing and Urban Affairs (MoHUA).
- Objective: To provide all weather pucca houses to all eligible beneficiaries in the urban areas of the country through States/UTs/Central Nodal Agencies.
- Eligible beneficiaries: Economically Weaker Section (EWS)/Low Income Group (LIG), Middle Income Groupincluding the slum dwellers.
- Coverage: Covers the entire urban area of the country, i.e., all statutory towns as per Census 2011 and towns notified subsequently, including Notified Planning/ Development Areas.
- Components: Implemented through four verticals:
- Beneficiary Led Construction/ Enhancement (BLC):
- Affordable Housing in Partnership (AHP):
- In-situ Slum Redevelopment (ISSR):
- Credit Linked Subsidy Scheme (CLSS):
- Initiative of this scheme:
- Affordable Rental Housing Complexes (ARHCs) for Migrant Workers/ Urban Poor: A sub-scheme under PMAY-U to provide ease of living to urban migrants/ poor in Industrial Sector as well as in non-formal urban economy to get access to dignified affordable rental housing close to their workplace.
- CLSS Awas Portal (CLAP): A common platform where all stakeholders are integrated in real time environment. The portal facilitates processing of applications along with tracking of subsidy status by beneficiaries. CLSS tracker has also been incorporated in PMAY(U) mobile App and UMANG platform.
- ANGIKAAR- A campaign for change management: Focuses on adopting best practices such as water & energy conservation, waste management, health, sanitation and hygiene for PMAY(U) beneficiaries.
- Technology Sub Mission (TSM): It facilitates adoption of modern, innovative and green technologies and building materials for faster and quality construction of houses.
- Global Housing Technology Challenge - India: To identify and mainstream a basket of innovative construction technologies from across the globe for housing construction sector that are sustainable, eco-friendly and disaster-resilient.
- Expected completion: December 2024 with all verticals, except CLSS.
- Significance: The Mission promotes women empowerment by providing the ownership of houses in name of female member or in joint name.
- Preference has also been given to differently abled persons, senior citizens, SCs, STs, OBCs, Minority, single women, transgender and other weaker & vulnerable sections of the society.
- All houses under PMAY-U have basic amenities like toilet, water supply, electricity and kitchen.
PMAY-GRAMIN
- Background: Indira Awaas yojana (IAY) has been restructured into PMAY-G.
- Nodal Ministry: Ministry of Rural Development
- Launched in: 2016.
- Type of scheme: Centrally Sponsored Scheme.
- Aim: To ensure the provision of pucca housing for all individuals who are homeless or living in dilapidated houses in rural areas except Delhi and Chandigarh by 2024, instead of the previous goal of 2022.
- Target: Construction of 2.95 crore houses by March 2024.
- Funding pattern: Shared between Central and State Governments in the ratio 60:40 in plain areas and 90: 10 for North Eastern and Himalayan States.
- Eligible Beneficiaries: All the houseless households living in zero, one, or two-room houses with kutcha walls and kutcha roofs.
- Criteria for Automatic/Compulsory Inclusion:
- Households without shelter
- Destitute/ living on alms
- Manual scavengers
- Primitive Tribal Groups
- Legally released bonded labourer.
- Selection of Beneficiaries: Through a three stage validation - Socio Economic Caste Census 2011, Gram Sabha, and geo-tagging.
- Benefits: Financial Assistance of ₹ 1,20,000 per unit for plain areas, and ₹ 1,30,000 per unit for hilly areas, difficult areas, and Integrated Action Plan districts.
- Can avail of institutional finance (loan) of up to ₹ 70,000 at 3% lower interest rate. o The minimum size of the house shall be is 25 sq m including a dedicated area for hygienic cooking. o In convergence with Swachh Bharat Mission-Gramin (SBM-G), get financial assistance of up to ₹ 12,000 for the construction of toilets.
- In convergence with MGNREGA, the beneficiary is entitled to employment as unskilled labour at ₹ 90.95 per day for 95 days.
- In convergence with Pradhan Mantri Ujjwala Yojana, one LPG connection per house is provided. o Payments are made electronically directly to bank accounts or post office accounts that are linked to Aadhaar.
- Exclusion: Candidates that have:
- motorised two wheeler, three-wheeler, four-wheeler and agriculture equipment or fishing boat, Kisan Credit Card (KCC) with a limit greater or equal to Rs.50,000, at least one member that is employed with the government or earning more than Rs. 10,000 per month, that pays Income Tax, professional tax or owns a refrigerator or landline phone connection.
Key observations & recommendations by Standing committee:
- Gap in housing demand assessment: Under PMAY-U, initially the total housing shortage was estimated at two crore houses. However, the actual demand for housing under the scheme stands at 1.23 crore. The Ministry informed the Committee that the initial figure for housing shortage was based on estimates whereas the scheme was demand driven. The Committee observed that since it is a demand driven scheme, some homeless people might not have availed its benefits due to non-fulfilment of eligibility conditions or requirement of land. It recommended the Ministry to conduct an impact assessment and accordingly extend the scheme with necessary changes or formulate another scheme to provide housing for the urban poor.
- Lack of basic amenities: As per PMAY-U guidelines, all houses under the affordable housing in partnership with private and public sectors and in-situ slum redevelopment (ISSR) verticals should have basic facilities like water, sanitation, and electricity. Further, urban local bodies (ULBs) should ensure that houses under credit linked subsidy scheme and beneficiary led construction (BLC) verticals have access to such basic services. The Committee noted that as of December 2022, 5.6 lakh houses were not delivered to beneficiaries due to lack of basic services.
- Timeline for grounding and completion: Under PMAY-U, of the total 123 lakh sanctioned houses, 107 lakh houses (87%) have been grounded till December 2022 and 61 lakh houses have been delivered to beneficiaries. Further, as of October 2022, less than 50% of houses have been completed in north eastern states (except Tripura) due to geographical and economic reasons. The Committee recommended that in order to achieve the scheme’s target by December 31, 2024, the Ministry should ensure strict timelines for starting and completing the construction of houses.
- Low sanctioning of houses under ISSR vertical: Under the ISSR vertical, slum dwellers are rehabilitated. The Committee noted that despite being an important vertical, as it provides housing to landless people, the number of houses sanctioned under it are low. Against a demand of 14.35 lakh houses, only 4.33 lakh were sanctioned. Further, as of December 2022, only 99,000 houses have been delivered and 1.08 lakh houses are non-starter (not grounded/ construction not started). Reasons for such poor performance under the ISSR vertical include availability of land, seeking statutory clearances, and clearing slums.