Will Everyone Get A House Under PM Modi’s Housing For All Scheme By 2022?

In 2015, Prime Minister Narender Modi launched a new housing scheme under Prime Minister’s Awaas Yojna with the aim of providing housing for all by 2022. Under the Pradhan Mantri Awas Yojana-Housing for All (Urban) alone, keeping in mind the slum decadal growth rate of 34%, the slum households were projected to go up to 18 million. About 2 million non-slum urban poor households are proposed to be covered under the mission. Hence, the total housing shortage envisaged to be addressed through the new mission is 20 million (2 crores).

The re-structured rural housing scheme Pradhan Mantri Awas Yojana-Gramin (PMAY-G), which has the objective of “Housing for all by 2022” was launched by Hon’ble Prime Minister on 20th November 2016, from Agra. About 2.95 crore houses are set to be constructed by 2022 to achieve the set objective of PMAY-G, which has been decided to achieve in phases. Thus, a total of 4.95 crore houses are to be constructed by 2022.

In a tweet on PMO India (@PMOIndia) on November 21, 2015, Prime Minister Narender Modi (PM @narendramodi) tweeted, “We have launched a ‘Housing for All’ program. It involves building 20 million urban houses and 29.5 million rural houses.”

Who Will Benefit From PMAY?

The beneficiary family should not own a pucca house (an all-weather dwelling unit) either in his/her name or in the name of any member of his/her family in any part of India. A beneficiary family will comprise husband, wife and unmarried children.

Under the new housing scheme, EWS households are defined as households having an annual income of up to ₹3,00,000.

LIG households are defined as households having an annual income between ₹3,00,001 up to ₹6,00,000. States/UTs have the flexibility to redefine the annual income criteria as per local conditions in consultation with the centre.

To check the demand of houses, the Chandigarh Housing Board (CHB) conducted a demand survey for allotment of 492 flats in sector 53 of Chandigarh against which only 129 applications were received, out of which 71 applications were received for 3-BHK, 23 for 2-BHK, 8 for one-BHK and 27 for EWS flats. The CHB has proposed to construct these 492 flats for allotment under self-financing scheme where the allottee will have to pay 100% payment before possession. Even after a decrease, the price of 3-BHK (HIG) is kept at ₹1.63 crores, 2-BHK(MIG) ₹1.36 crores, 1-BHK (LIG) ₹90 lakh and a two-room flat for EWS ₹50 lakh.

With the passage of five years out of seven years, a major span has become the past, and only two years are left in hand to fulfill the promise under Prime Minister’s Awas Yojna 2015, to provide housing for all by 2022.

The Economic Survey 2020, states that the decline in household investment in dwellings, other buildings and structures, since a six-year span over 2011-12 to 2017-18 is a reflection of slower growth in purchase of houses by households.

The Financial Express highlights the survey’s suggestions that real estate developers take a haircut to bring down housing prices, which it points out have remained high despite a huge inventory of 9.43 lakh units worth a whopping ₹7.77 lakh crores, stuck at various stages across the top eight cities in the country.

But, would a slight hair cut in housing prices be sufficient to attract buyers? No, if we see the prices fixed (1BHK for LIG at 90 lakh and a two-room flat for EWS at 50 lakh) by the central government ruled Union Territory, Chandigarh for its Housing Board projects floated, can anyone belonging to LIG and EWS category purchase these houses? In Haryana also the prices of HUDA floated plots in Panchkula, Gurugram, Faridabad, etc. for EWS and LIG categories have gone beyond the reach of these category buyers.

Shouldn’t the Finance Minister of India direct the government housing projects to lower the prices of their projects, so that other private players may also follow them? With the passage of five years out of seven years, a major span has become the past, and only two years are left in hand to fulfill the promise under Prime Minister’s Awas Yojna 2015, to provide housing for all by 2022.

Monthly summary of the principal activities of Ministry of Housing and Urban Affairs for October 2019 (No. A-42011/1/2019-Coord-Dated the 2 December 2019) reveals that under Pradhan Mantri Awas Yojana (PMAY)/Housing For All (HFA), more than 93 lakh dwelling units in 19,471 projects with an investment of  ₹5,55,754 crores involving central assistance of ₹1,45,949 crore have been approved under PMAY. So far, 55 lakh houses have been grounded for construction, 28.02 lakh houses have already been constructed, and 25.55 lakh houses have been occupied.

FactChecker.in, India’s dedicated fact check initiative, writes, “About 1.44 million houses had been constructed under PMAY-Urban up to January 31, 2019, and 1.39 million had been occupied, according to the latest available Ministry of Housing and Urban Affairs (MoHUA) data presented in the Lok Sabha in February 2019. This is 20% of the 7.6 million houses that have so far been sanctioned.

In rural India, the government had completed construction on 7.7 million houses, or 77% of the target of 10 million by the deadline of March 31, 2019, for the first phase of PMAY-Rural. It has yet to construct 2.3 million houses, even as the next phase of PMAY-Rural begins, according to the PMAY dashboard on April 15, 2019. However, only 34% of beneficiaries have so far received full payment, data show.”

But Asianage in its report dated August 26, 2019, claims a very serious and dark side of PMAY, “The ambitious target of Prime Minister Narendra Modi to provide ‘housing for all’ by 2022 under Pradhan Mantri Awas Yojana-Gramin (PMAY-G) seems to be in serious jeopardy, since as many as 14 states, where the BJP is directly in power or is in alliance with a regional party, have not sanctioned a single unit for construction in 2018-19, which was the last year of the first phase of the scheme.

These 14 laggard states are Gujarat, Haryana, Himachal Pradesh, Uttarakhand, Assam, Tripura, Arunachal Pradesh, Goa, Karnataka, Bihar, Manipur, Meghalaya, Mizoram and Nagaland, according to official data available with The Asian Age. Other than these 14 states, there are six more states, which have failed to open their account in terms of sanctioning housing units for construction under PMAY-G during 2018-19.”

What a melancholic situation it is!

Showing the decreasing figures of loan disbursal to EWS and LIG categories for Financing for affordable housing, RICS (Royal Institution of Chartered Surveyors) in association with international property consultant Knight Frank in its report dated 30 July 2019, mentions,

 “From fresh disbursals of HFCs and Scheduled Commercial Banks (SCBs), it is evident that the share of EWS sector in new disbursals has come down each financial year from 21% in FY 2013 to just 10% in FY 2018. Moreover, even the share of LIG sector in fresh disbursals has also declined from 39% in FY 2013 to 33% in FY 2018.”

Why are the banks not disbursing the housing loans to the EWS and LIG categories as per their requirement to boost the housing sector? A retired banker says, “The prices of the houses are unchecked high ups and beyond the purchasing power of EWS and LIG sections. Banks finance the borrowers as per their repayment capacity. These categories neither have sufficient savings for their margin money share nor have the surplus funds to repay the loans out of their limited income. The only solution is either the government to halve the housing prices or to double up the income of these categories .”

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