The Pradhan Mantri Awas Yojana – Urban (PMAY-U): The Narendra Modi-led central government needs to shell out a whopping Rs 1 lakh crore over the next three years and about Rs 1.5 lakh crore in seven financial years through 2022, at an average Rs 1.5 lakh per house, to achieve its goal of housing for all by 2022, according to a report by CRISIL. However, it has just disbursed Rs 32,500 crore or 22% of this so far.
Announced in June 2015, PMAY-U – which is being implemented by the Ministry of Housing and Urban Affairs – needs a concerted push to succeed. The ministry has a target to sanction 75 lakh houses and construct 30 lakh of them by the end of the current financial year 2018-19.
As on November 26, 2018, the government sanctioned a total of 63 lakh houses. However, just 12 lakh houses have been constructed and 23 lakh are under construction. Uttar Pradesh, Andhra Pradesh, Madhya Pradesh, Maharashtra and Tamil Nadu together accounted for 55% share of the sanctions.
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“Our calculations show the government will have to garner around Rs 1 lakh crore over the next three years if it has to achieve the target of building 1 crore houses. This is going to be a tall task given the current fiscal arithmetic,” said Prasad Koparkar, Senior Director, CRISIL Research.
Of the total central assistance, Rs 19,000 crore has been factored in the budgetary allocation until the current financial year. The balance would be met through future budget allocations and internal and extra-budgetary resources, of which Rs 25,000 crore has been provided for fiscal 2019, the report added.
The government has already kicked off the process to raise capital, for the extra budgetary resources, in the form of bonds through companies such as the Housing and Urban Development Corporation Ltd.
It may be noted that the scheme is facing rough weather due to several reasons, which should be addressed. These issues include low participation from private real estate development, increasing cosntruction cost on account of lack of bulk sourcing of materials, unavialblity of land in prime areas, bidding mechanism, among others.