Prime Minister Narendra Modi has unveiled a novel scheme aimed at addressing the critical issue of housing shortage for the urban poor. However, since the launch of the PMAY-U programme eight years ago, only two-thirds of the approved houses have been completed or handed over, amounting to approximately 76.25 lakh houses out of a total of 1.19 crore sanctioned units.
The Central government provided assistance totaling INR 1.49 lakh crore, with its share limited to 24.4 percent, while states and urban local bodies contributed 16 percent.
Under the proposed scheme, there is a growing consensus to reduce the financial burden on beneficiaries to a minimum of 40 percent. This suggestion stems from a parliamentary committee report that highlighted the financial challenges faced by beneficiaries due to their low incomes. While some state governments have attempted to facilitate access to bank loans for such beneficiaries, financial institutions have been unresponsive, citing a lack of proof of consistent income.
The parliamentary committee has also presented several well-considered recommendations on the implementation of the PMAY-U, and it would be prudent for the government to carefully consider these suggestions while shaping the new scheme.
To ensure the success of urban housing initiatives, various factors such as high land costs, floor space index constraints and complex certification processes must be addressed. This calls for comprehensive consultations led by the Central government, involving state governments, local authorities, urban planning bodies, urban sector professionals, financial institutions, etc.
