Will it change the face of housing?

In 2015, the central government launched the Pradhan Mantri Awas Yojana (PMAY) to provide housing for the Economically Weaker Sections (EWS) and Low Income Group (LIG) of the society by 2022. In 2017, the government decided to provide ‘Housing for All’ by including even the Middle Income Group (MIG) under the ambit of the scheme. For an ambitiously developing country like India, it makes obvious sense to provide pucca houses with water facility, sanitation and electricity supply round-the-clock to the traditionally poorer (or not rich) sections of the society. The table below illustrates the ambit of the scheme:

CategoryAnnual IncomeAmount of loan covered through the subsidy on interestSubsidy on interest
EWSUp to 3 lakh6 lakh6.5%
LIG3-6 lakh6 lakh6.5%
MIG-I6-12 lakh9 lakh4%
MIG-II12-18 lakh12 lakh3%

Therefore, it plans to give a credit-linked subsidy to weaker and mid-income sections on loans taken for new construction or renovation of existing homes. For those in the lower and mid-income groups, the PMAY reduces the cost of acquiring a home by ₹1lakh to ₹2.3 lakh. Its end goal is to provide homes to 18 million households in urban India and nearly 30 million households in rural India. The youth joining the labour force with incomes less than 18 lakh can also avail this scheme. Another misconception is that PMAY provides small houses only. You can take a loan of 1 crore to buy a bigger house as well, but the PMAY will cover the interest on loan up to 12 lakh only. If not anything else, construction of 12 crore houses will boost employment and GDP of the country and stimulate the construction sector.

Conflicting Narratives

Notwithstanding its good intentions, PMAY still faces the prospect of encountering a number of hurdles during its implementation (as is the case with all government schemes). While Union Minister of State with Independent Charge in the Ministry of Housing and Urban Affairs, Hardeep Singh Suri has said that the government would meet its target of building 11 million homes much before 2022, PMAY (urban) has only met 8% of its target till now. On the positive side, PMAY (rural) is on track to meet its target of delivering one crore houses by 2019. On the negative side, PMAY has used just 21 percent of the funds allocated to it. Simultaneously, 2017 saw a forceful eviction of more than 2.6 lakh people across urban and rural India, including the homeless, according to a recent report by the Housing and Land Rights Network India (HLRN). This means nearly 150 homes were being destroyed every day. The forceful evictions in 2017 were more than those in 2016. Therefore, on one hand, we see good progress being made by the PMAY; we also see many lags and parallel issues affecting the implementation process.