In a move that is expected to spur construction activity across rural India, the government will build 1 crore houses for the rural poor over three years—FY17 to FY19—spending Rs 81,795 crore under the new Pradhan Mantri Awaas Yojana (PMAY) Gramin. While Rs 60,000 crore will come from budgetary allocations, the balance will come from Nabard. Under the scheme, financial assistance is provided to all who don’t have their own house and households living in dilapidated houses across the country, barring Delhi and Chandigarh, for construction of pucca houses. This is apart from the R3 trillion scheme to build 20 million houses for urban poor. The cost of building the house will be shared between the Centre and the states—60:40 in the plains and 90:10 in the North-East and hilly states. While PMAY is based on the UPA’s Indira Awaas Yojana (IAY), this time round, the minimum area has been increased to 25 sq m and the financial assistance has been hiked to R1.2 lakh (in the plains) and R1.3 lakh (hilly areas) from the earlier Rs 70,000 and Rs 75,000.
The aim is to leverage benefits that people get from a permanent house. But, it needs to identify potential beneficiaries based on the information from the Socio Economic and Caste Census. A quicker way out would be to invest in setting up prefabricated houses since it lowers costs substantially. To bring in a degree of synchronisation, the manufacture of bricks for the scheme will be taken up under MGNREGS. That leads to more employment in rural areas. Apart from jobs, it will cause a spurt in purchase of building materials, use of both skilled and unskilled labour, transport services, and thus mean huge positives for the economy. It is still early days, but the long-term benefits are huge.