PMAY FAILURE: UNAFFORDABLE HOUSING?

Introduction

On one side, the recent headlines by media houses covering PM Modi’s inauguration of 1675 flats for EWS sections in Ashok Vihar garnered huge attention and praise from various political parties, members of the society and even the slum-dwellers. On the other side, the harsh reality of widespread homelessness still casts a shadow on such headlines. As per official government records, a total of 9,38,348 people were recorded homeless in the last government census. Non-official reports go on to the extent of recording around 1.77 million homeless people in India. These stark numbers highlight the severity of the housing crisis, which needs to be addressed urgently. This blog will explore the challenges of affordable housing in India, particularly concerning the PMAY scheme. It will then attempt to analyse the shortcomings, and provide a solution, to achieve the goal of “affordable housing to all”.

Legal Blueprint

The unavoidable consequences

Though no clear-cut definition could be provided for the term “affordable”, it is generally meant as the “economic potential of an individual to buy a house”. As the reports above highlight, India is still grappling with the affordable housing crisis for multiple reasons. Lack of adequate housing and shelter directly leads to an increase in poverty. While income is generally considered to be the sole criterion to determine poverty, it is also affected to a great extent by various other factors like living standards, health, utilities etc, all of which are substantially affected due to lack of affordable housing.

Judicial Interventions in Affordable Housing

Various Supreme Court decisions have addressed this issue. For eg, the Supreme Court in Olga Tellis v. Bombay Municipal Corporation highlighted how poverty violates the basic human rights of an individual, which are constitutionally protected by Article 21 of the constitution. It acts as a barrier to the enjoyment of other human activities. Further, the court also opined that economically weaker sections (EWS) are the most vulnerable group, who must be provided with adequate housing and shelter. The court in numerous decisions like Ajay Maken v. Union of India, and Sudama Singh v. Government of Delhi, discussed the issue of homelessness and evictions, and how it affected the marginalized and vulnerable the most.

Government Policies for Affordable Housing

The government of India also launched various policies like the National Housing Policy, National Housing and Habitat Policy 1998, and National Urban Housing and Habitat Policy 2007, to ensure access to affordable housing for the most vulnerable groups of society. Further, schemes like Pradhan Mantri Awas Yojana (PMAY), Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Rajiv Awas Yojana (RAY), Affordable Housing in Partnership Scheme (AHP), etc were launched to achieve the objective of affordable housing.

The PMAY Scheme

Pradhan Mantri Awas Yojana (PMAY) is considered the largest housing scheme launched by the government of India to address the issue of affordable housing in India. This scheme started with an ambitious project of building 2 crore affordable houses by 31 March 2022. The government also approved a huge budget outlay of ₹43,922 crore under this scheme. The objective of the scheme was to provide affordable houses to address the concerns arising from the lack of housing facilities like degradation in health, living standards, poverty etc. It however failed to achieve its stated goal, leaving millions of people still homeless. Out of the target of building 2 crore households by 2022, only 1.18 crore houses have been sanctioned as of 15th July 2024. Out of the sanctioned strength, only 84.7 lakh houses have been completed so far. This predicament is further exacerbated by the reality that 47% of the houses built under this scheme are unoccupied as per the TOI report. This not only undermines the scheme's objectives but also burdens society by negatively impacting living standards, health and perpetuating poverty. The next sections of this blog will highlight the reasons why PMAY failed, and possible solutions to ensure that the scheme achieves its stated goal, thereby addressing the concerns arising from the lack of affordable housing.

Why PMAY failed?

Land Scarcity

PMAY focuses on providing affordable houses mainly in the metro cities, which are the hub for commercial and residential activity. Owing to the wide employment opportunities available in these metros, the land in these areas naturally requires a premium, which makes the affordable housing project economically inviable. Further, many of the lands in these areas, especially in Delhi are locked with slums and congested areas. Owing to huge demand, but scarcity of the land, developers often are unable to recover the construction costs in light of the already low prices of land under PMAY.

Located in remote areas

Due to the scarcity of land in the economic zones of cities and metros, most of the PMAY projects are located on the periphery of the city. This makes them unattractive because the people, especially the poor have to travel long distances from their homes to the workplace, often located at the centre of the cities. Further lack of developed infrastructure and transport connectivity add to the woes, making it unattractive. This also explains why 47% of the houses under this scheme, are still unoccupied.

Huge delays

Complex and lengthy application process often leads to delays causing the cost of these projects to be increased substantially. In cities, like Mumbai, it is estimated that the delay in constructing houses under these schemes causes the cost of the project to be increased almost by 30%. The lack of availability of modern technology further leads to delays, increasing the cost of construction. The conventional practices of constructing houses have led to a construction cycle of around 3 years. Experts claim, that using modern technology can substantially reduce this cycle from 3 years to 90 days, substantially reducing the construction cost, and making this project economically sustainable.

Identification of wrong beneficiaries

The eligible number of people for allocation under PMAY is around 3 crore, out of which only 51 lakh are approved by the ministry for allocation. Now what’s the basis of choosing these beneficiaries?  The rural areas are still plagued with the division of societies and groups based on castes, socio-economic conditions etc. Beneficiaries at the gram level are identified by the gram panchayat, which is often politically motivated and biased towards the upper caste. The benefits of this scheme, therefore do not reach the actual beneficiaries and are often absorbed by the powerful and dominant cast. This thereby undermines the objective behind introducing PMAY.

Other issues

Delays in project approvals due to malpractices, corruption, inefficient policy implementation, lack of adequate political will, and poor coordination between different departments, further add to the issue. Actual beneficiaries of the scheme often fail to get the scheme's benefits due to complex application procedures, creating a significant barrier to accessing affordable credit. While PMAY is an important step toward affordable housing in India, certain steps are needed to ensure that the scheme achieves its state goal.

Proposed solutions

A structured level approach, with grassroots connectivity, needs to be undertaken within the PMAY scheme to address the urban housing crisis. The legal framework must be strengthened by enacting a national law strengthening the right to shelter, preventing forced evictions along reserving or allocating certain land to ensure affordable housing. Incentivising the parties to enter into public-private partnership (PPP) along with giving them subsidy and tax benefits can encourage private partnership and add strength to the PMAY. Sustainability of the sector must also be encouraged by using innovative construction technologies, like prefabrication and eco-friendly materials, which also reduce the cost substantially. Implementation can also be enhanced by grassroots engagement, training NGOs and local bodies, and inclusive decision-making. Private organisations including NGOs can assist the centre in monitoring the implementation of PMAY, preventing the inclusion of wrong beneficiaries, and undermining the objective of affordable housing for all. Further financial mechanisms need to be strengthened by expanding microfinance, low-interest loans, subsidies etc, addressing the lack of fiscal allocation under PMAY. In last, large-scale developments must be prioritized for urban land use and zoning reforms to ensure affordable housing for all.

Conclusion

The housing crisis in India’s urban areas is a complex interplay of socio-economic, challenges. While schemes like PMAY have made some progress in society, more comprehensive and innovative solutions are required to address the given issue. A multi-pronged approach within the PMAY, which combines legal frameworks, government policies, grassroots initiatives, and private sector involvement is required to ensure affordable housing for all. This will enable India to achieve its targets of “Housing for all” by addressing the root causes of homelessness and PMAY failure, as addressed in the given blog. With sustained efforts and addressing these issues, PMAY can evolve into a transformative scheme ensuring a roof over the head of every Indian.