Over 50,000 Homes Approved Under PMAY (Urban); MP The Biggest Beneficiary

The Ministry of Housing and Urban Poverty Alleviation (HUPA) has approved a proposal of construction of 52,319 affordable homes at an investment of close to Rs 3,000 crore. This makes the overall number of homes sanctioned under the Pradhan Mantri Awas Yojana (PMAY) touch 13.43 lakh. This time, Madhya Pradesh is the largest beneficiary, and will see the construction of over 25,000 affordable homes under the scheme. Others states where new houses will be built under the scheme include Uttar Pradesh, Chhattisgarh, Maharashtra, Nagaland, Puducherry and Daman, in the order of the number of homes allotted.

How it works?

Under the scheme, eligible beneficiaries would be given a Central assistance of Rs 1.50 lakh for the construction of new houses on their land or for improving the condition of their existing homes.

Under the PMAY, the Central government provides aid to urban-local bodies in four ways. It could be either rehabilitation of slum dwellers with private assistance or affordable housing with private partnership or beneficiary led constructions (as in the case with Uttar Pradesh) or credit-linked subsidies.

Apart from credit-link subsidies, it is the government that will have to take the initiative to bring the PMAY to fruition.

Dr Gagan Roy, consultant, planning and implementation, Government of Odisha says: “Political will of the state governments is a very important factor. The new approach for implementation is best in the recent scenario and is fully Direct Benefit Transfer (DBT). The socio-economic status is the best approach with utilisation of modern technology adding value to it. Strong Information, Education and Communication campaigns (IEC) is required. Often, political will, financial capacity of state and Centre, corruption, adequate land for construction and even burgeoning population act as major roadblocks.”

Sriram Kalyanaraman, managing director and chief executive officer of the National Housing Bank, says that loans for homes under Rs 10 lakh accounted for over 30 per cent of the total loans. This means housing finance companies and banks owe their growth prospects to loans taken for affordable housing. Data with PropTiger also show that even in the cities, homes priced under Rs 50 lakh had greater demand, and about 60 per cent of new launches by end of September were concentrated in this segment.

The PMAY (Urban) scheme definitely shifts focus towards the lower segment housing. Cheaper loans would help realise the cause of the Housing For All by 2022. With interest subsidies announced by Prime Minister Narendra Modi on the New Years' Eve, analysts are expecting similar subventions for those looking at affordable homes. Moreover, those projects that happen to be within city limits and are affordable by definition should also benefit from such subsidies, feel experts. The Union Budget 2017-18 would need to touch these aspects.