Daily Answer Writing
02 January 2021

Q-1) India is fully capable of providing 'Housing for all', and yet there is a demand and supply mismatch in the housing sector of India. What are the reasons and consequences of such a mismatch? Critically analyse the success of Pradhan Mantri Awas Yojana in this regard. (250 Words)

Source: The Hindu Front Page: PM unveils project for affordable housing.

Approach Answer:

Introduction: In the recent years, there have been a rise in unsold units across the country with one estimate putting their value at over ?4L Crore. On the other hand still around 80Lak families either lack a decent living home with a functioning toilet or are homeless according to Global Homelessness Statistics Report. This is because most of the homes that are built are either middle income section or are luxury. However the greatest demand in India is from lower income group for affordable houses or basic houses.

Reasons for Demand and Supply Mismatch:

  • Unaffordability of the Affordable houses: The median household income in India is just ?11,000; It means that 50% of Indians cannot afford a affordable house in a metropolitan area, which would cost above ?10 Lakhs.
  • Investment demand for Real Estate: It pushes the prices of the houses up, keeping it away from the reach of common buyers.
  • Stalling Real Estate Sector: Most of the stalled projects are solvent but struck for liquidity. This situation has arisen because Real Estate companies catered more to the Investment demand rather than real demand. When the liquidity for Investment demand dried up, the Real estate prices crashed after 2015. This has substantially reduced the apatite of the sector to construct more.
  • Bad Planning: Over the years, its been realized that city plans in India have design flaws.  They have overlooked the demands of lower income group, by it assigning considerable less area for affordable housing than required, which has forced people of lower income group to live in slums.

Consequences of this mismatch:

  1. Development of Slums in Urban centres: Around 17% of World's slum dwellers(which is around 78 million people) are reported to live in India.
  2. Homeless ness in Rural areas: In rural areas, people are forced to live in kutchha houses made of mud and husk.
  3. Reduced standards of living and access to basic facilities: People are forced to live without tapped water connection, sewer connection and without electricity.
  4. Health Problems: Slums are known to be the superspreaders of epidemics. For example, Dharavi which is the largest slum in the world experience a wild spread of SARS CoV-2, earlier this year. This is due to proximity of houses and poor sanitation.
  5. Against Right to life: Right to life also includes life to decent environment and right to live with dignity. This is violated when a person is rendered homeless and forced to live in a petiable condition.

In this context Pradhan Mantri Awas Yojana(PMAY), is an essential program of the government of India which aims 'Housing for all' by 2022. It is split into two components for better catering to the Urban and rural needs.

  1. Pradhan Mantri Awaas Yojana-Gramin(PMAY-G):  which was earlier known as Indira Awaas Yojana(IAY).
  2. Pradhan Mantri Awas Yojana- Housing for all(Urban) Mission which has subsumed in itself the earlier program of Rajiv Awas Yojana.

Success of Pradhan Mantri Awas Yojana(PMAY - G): Government is building around 3 million houses annually in rural areas under PMAY - Gramin and has till April 2020 completed 1.40 Crore houses. It involves:

  1.  Unit assistence of ?1,20lakh in plain areas and ?1,3 lakh in hilly states and difficult areas;
  2. ?12,000/- as assistance for construction of toilet under Swachh Bharat Mission
  3. Support of 90 person days in plain areas and 95 person days in hilly states and difficult areas under MGNREGS through convergence.
  4. An optional loan of up to ?70,000/-

Success of PMAY-U : Under it has taken four sub-schemes:

  1. In-Situ Slum redevelopment: with a grant of ?1 lakh/house,
  2. Credit Linked Subsidy Scheme(CLSS) for weaker sections with interest rate subvention at 6.5% for EWS/LIG categories so that interest payable at present is less than 4%.
  3. Affordable housing in PPP(AHP): Central assistance at ?1.5lakh/EWS house in projects where 35% of the houses are mandatorily for EWS category;
  4. Subsidy for beneficiary-led individual house construction or enhancement(BLC): ?1.5 lakh per house for EWS category in slums or otherwise if states/cities make a project.

This would not only provide housing, it would also provide employment as construction sector is the largest employer after agriculture directly and also provide indirect employment by raising the demand of Steel and Cement that depend on it.

Conclusion: PMAY is an essential element to realize the Sustainable development Goal 11 to "Make cities and human settlements inclusive, safe, resilient and sustainable". Further, India needs to continue such efforts as it is estimatedd that we would have to construct 700 to 900Mn square meters of residential and commercial space every year, till 2030, to accommodate for the growing population.

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