Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.
Pradhan Mantri Awas Yojana – Urban
What to study?
For Prelims: PMAY- Urban- key features.
For Mains: Significance of the scheme, challenges ahead and measures needed to achieve the target.
Context: Ministry of Housing & Urban Affairs has instituted PMAY(U) Awards for Beneficiaries for the first time to recognise the contribution of States/UTs, Urban Local Bodies and Beneficiaries.
This special award for beneficiaries is likely to enthuse the States / UTs to fulfil the dream of house for millions, a reality, and also encourage beneficiaries to build their house aesthetically using sustainable methods.
About PMAY- Urban:
The Pradhan Mantri Awas Yojana (Urban) Programme launched by the Ministry of Housing and Urban Poverty Alleviation (MoHUPA), in Mission mode envisions provision of Housing for All by 2022, when the Nation completes 75 years of its Independence.
The Mission seeks to address the housing requirement of urban poor including slum dwellers through following programme verticals:
- Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource.
- Promotion of Affordable Housing for weaker section through credit linked subsidy.
- Affordable Housing in Partnership with Public & Private sectors.
- Subsidy for beneficiary-led individual house construction /enhancement.
- The beneficiaries are poor and people living under EWS and LIG categories in the country.
- The scheme is divided into three phases. In the first phase, a total of 100 cities will be covered from April 2015 to March 2017. In phase two, 200 cities will be covered from April 2017 to March 2019. In the third phase, the leftover cities will be covered from April 2019 to March 2022.
- The government is providing an interest subsidy of 6.5% on housing loans which can be availed by beneficiaries for 15 years from start of loan date.
- The government will grant Rs 1 lakh to all the beneficiaries of the scheme. In addition, Rs 1.5 lakh will be given to all eligible urban poor who want to construct their houses in urban areas or plan to go for renovation in their existing houses. One can also avail loans under this scheme to build toilets in existing houses.
- According to the findings by ratings agency Crisil, the central government has to mobilise Rs 1 lakh crore in the next three years for achieving its target of building 1 crore houses under the Pradhan Mantri Awas Yojana – Urban (PMAY-U).
- This is going to be a tall task given the current fiscal arithmetic. The scheme also faces headwinds such as unavailability of land in prime areas, low participation of private developers on account of brand dilution, bidding mechanism, stringent cost and time schedules resulting in low yields, increasing construction costs due to absence of bulk sourcing of materials, and lack of new technology that impacts productivity, cost efficiency and quality.
Significance of the scheme:
PMAY-U does offer a huge opportunity for several sectors by setting off a virtuous cycle.
One crore houses would mean an opportunity for over Rs 2 lakh crore of home loans, and incremental consumption of 80-100 million tonne of cement and 10-15 million tonne of steel.
The construction opportunity is of about four billion square feet over the life of PMAY-U and all that would translate into 9-10 crore incremental jobs over the execution period.