New Scheme for Urban Housing

• 17 Aug 2023

Recently, Prime Minister announced a scheme aimed at assisting urban poor in building houses. This indicates a shift in government policy to address the persistent shortage of urban housing.

• This announcement comes after the extension of the Pradhan Mantri Awas Yojana-Urban (PMAY-U) till December 2024, with a renewed focus on completing sanctioned housing projects promptly.

Key Points

• Reassessment Prompting the Shift: The change in government stance suggests that a reassessment of the Pradhan Mantri Awas Yojana-Urban (PMAY-U) may have been a driving force behind this move.
• Gaps in Previous Scheme: Despite the scheme's existence for eight years, only about two-thirds of sanctioned houses have been completed or handed over by August 14, leaving a considerable gap in achieving the goal of 'housing for all.'
• Challenges in PMAY-U Implementation: Central assistance amounted to ₹1.49 lakh crore, with the Centre's share at 24.4% and State and urban local bodies contributing 16%.
• Beneficiaries were expected to cover the remaining 60%, approximately ₹4.95 lakh crore, a burden that proved challenging due to their limited income.
• Some states attempted to facilitate bank loans for beneficiaries, but financial institutions remained hesitant due to insufficient proof of consistent income.
• Recommendations for the New Scheme: A parliamentary committee's suggestions for PMAY-U implementation offer valuable insights for the new scheme.
• New Methods: One key recommendation is to move away from uniform and fixed assistance across the country and adopt a flexible approach based on geographical and contextual factors.
• Collaborative Approach Needed: To overcome challenges in urban housing, a collaborative effort involving the central government, state governments, local bodies, urban planning entities, financial institutions, and activists is imperative.
• Addressing Problems: Factors such as high land costs, restrictions on floor space index, and complex certification processes need to be collectively addressed.