India’s Affordable Housing Program: A Beacon of Hope for Millions

“In June 2015, the Prime Minister of Bharat - Mr Narendra Modi, launched an affordable housing scheme and named it Housing for All by 2022. Although, a year later, it was renamed and is still popularly known as Pradhan Mantri Awas Yojana (PMAY).”

The availability of affordable real estate is a global concern. Governments globally are taking several initiatives to help overcome this problem. One such initiative is the Pradhan Mantri Awas Yojana - introduced by the Government of India.

Indeed, the program has set an example for the whole world and is fondly known for its ambitious goals and success in providing housing to millions.

The program aims to assist eligible families and individuals in constructing and/or acquiring a home at an affordable price.

Notably, as of September 2023, over 11.89 million houses have already been completed and delivered under the scheme, and over 25 million more houses are under construction.

It is also one of the world’s largest government housing schemes.

Pradhan Mantri Awas Yojana in the Making

Shortage of livable housing was one of the biggest concerns that Bharat or The Republic of India had to face immediately after gaining its Independence in 1947.

In a country where more than half of its population lived in villages and worked in agriculture, sanitary practices were alien concepts and beyond reach. Additionally, most of the houses were weak and could not bear the minimum threat levels of common natural hazards like gusting winds and heavy rains. Or, in other words, a large population lived in Kucha Houses made of mud and thatch.

So, the government had to intervene and offer a solution.

The 1950s - India’s First Housing Initiative

The very first social housing scheme to address the housing shortage in the country was launched in 1957. It was called the Village Housing Program (VHP).

The aim was to provide loans to eligible rural families for building their own homes at subsidized rates for 10-15 years. It was indeed a moderately successful program.

However, the program faced a lot of challenges including the shortage of funds, a lack of awareness among the general public, a complex application process, and corruption in the bureaucratic system. As a result, the program was phased out eventually.

Despite all these challenges, the program lasted nearly three decades before it was replaced.

The 1980s - India’s Fight Against Poverty

The Village Housing Program was discontinued and replaced by the Indira Awas Yojana (IAY) in 1985.

The new program took into account the shortcomings of the Village Housing Program and the changing economic dynamics in the country.

While, this program also aimed at providing subsidized loans to eligible individuals and families to build homes, like its predecessor, the difference was Indira Awas Yojana specifically aimed at poor households in rural India. Especially the ones below the poverty line.

As a result, Indira Awas Yojana proved to be better than its predecessor, helping reduce the housing shortage in the country by over 50%.

To put this into perspective, over 40 million houses were constructed and over 20 million families benefitted from this program.

2013 - India Steps Into The Modern World

By the beginning of the new millennium, the need for social housing was hard felt all over the country - thanks to the rapidly growing population and urbanization with it. The need was no longer imminent in any particular region. Neither was it confined to a certain economic or social class.

In fact, as opposed to the common beliefs, in some cases, the need for sustainable housing was felt harder in the urban areas than in rural ones.

The biggest challenge of this new world was the shortage of land for settlers in desired locations.

The rapidly growing capitalism invited thousands of immigrant workers from the rural areas of the country into the cities. As a result, they were forced to settle in tightly packed areas, which gave rise to the slums.

In 2013, the Government of India launched the Rajiv Awas Yojana (RAY), an urban housing scheme to provide affordable housing to all eligible urban households.

Notably, this was also the first housing scheme since Independence that focused on the urban population.

The Rajiv Awas Yojana had three components:

• Providing affordable housing to Slum dwellers in India (Slum-Free India);

• Providing affordable housing to low-income households (Affordable Housing in Partnership); and

• Providing subsidies on interest rates on housing loans to low-income households (Subsidy for Interest in Housing Loans).

The Year 2015 - Modern Problems Require Modern Solutions

The Rajiv Awas Yojana did not last for very long due to the lack of a proper roadmap. Besides, it did not include the rural population and was only focused on the urban population.

In June 2015, the Prime Minister of Bharat - Mr Narendra Modi, launched a social housing scheme and named it Housing for All by 2022. Although, a year later, it was renamed and is still popularly known as Pradhan Mantri Awas Yojana (PMAY).

The Pradhan Mantri Awas Yojana included several years of learning and blended it with modern logistics backed by technology. It certainly took into account the shortfalls of all earlier schemes and brought a fresh execution plan to the table.

Supposedly, this new scheme is the flagship social housing program in the country, and certainly the first of its kind. It is perhaps the only program so far, that sets sustainable development goals for all, including all classes and sections of the society.

Working of the World’s Largest Government Housing Scheme

The Pradhan Mantri Awas Yojana, unlike its predecessors, is not focused on any particular economic or social class. It is indeed a one-of-a-kind project focused on inclusive growth for all.

The scheme targets a wide range of beneficiaries, including women, the elderly, persons with disabilities, and more. In addition to this, it also promotes the development of sustainable and livable communities.

Execution of the Scheme

Since the scheme is so widespread its execution is controlled at different levels by different government ministries/departments.

At the national level, the Ministry of Housing and Urban Affairs (MoHUA) takes care of the planning and execution. Whereas, the state and union territory governments are responsible for execution at the local level.

The scheme is also funded by the central government, the state and the union territory governments, at their respective levels. However, the beneficiaries are also required to arrange for the funding in their personal capacity.

Who gets the Benefit?

Of course, with a plan so elaborate the interests of the beneficiaries need to be protected. Therefore, at every level, there are certain eligibility criteria that the beneficiaries need to meet.

The program has four main components:

• The first component focuses on providing affordable housing to all eligible urban households (Pradhan Mantri Awas Yojana - Urban). To be eligible under this component, the beneficiary households should not have more than 1.2 million Indian Rupees worth of annual income. They should also be living in an urban area.

• The second component aims at the rural households (Pradhan Mantri Awas Yojana - Rural). The subsidies are given to households with no more than 0.6 million Indian Rupees worth of annual income. Of course, the beneficiaries are required to be a resident of a rural area.

• The third component provides affordable housing to slum dwellers in urban areas (In-Situ Slum Redevelopment). The slum dwellers are relocated to newly constructed houses by the government. The eligibility is quite simple - they should be a slum dweller and willing to relocate to a government-built new house.

• The fourth component aims to provide affordable rental housing to the poor in urban areas (Affordable Rental Housing Complexes). Under this component, the government builds houses and then rents out to eligible households with less than 0.3 million Indian Rupees worth of annual income at affordable rates. Additionally, the beneficiaries are required to be living in an urban area.

In addition to this, there are a few general eligibility criteria that all have to comply with.

• The applicant must be an Indian Citizen.

• The applicant must not own a Pucca House in any part of India.

• The applicant must not have availed of any other housing scheme from the Government of India or the state government.

The PMAY is a comprehensive scheme that addresses the needs of a wide range of beneficiaries. It is helping to make the dream of homeownership a reality for millions of Indians.

What does it mean for the Indian Population?

In the world’s most populated country, running any program is not an easy task. More so, when the program has several moving assets both physical and non-physical belonging to different classes.

Despite all this, the Pradhan Mantri Awas Yojana has proved to be a greatly successful affordable housing scheme in the country. It has impacted millions of Indians.

Under the scheme, millions of low-income Indian families have had the chance to own a home and improve their quality of life.

According to a study by the National Council of Applied Economic Research, the Pradhan Mantri Awas Yojana has helped reduce poverty in India by 1.3 percentage points. The study also found that the program has had a positive impact on the health and well-being of the beneficiaries.

Additionally, this affordable housing program has also had a positive impact on the Indian economy. The scheme has created millions of jobs in the construction sector and has also boosted the demand for a wide range of goods and services.

The Challenges of Pradhan Mantri Awas Yojana

It would be wrong to say that India’s flagship affordable housing program has faced no challenges at all. In a country so vivid in terms of economic distribution, religion, and social classes, it is no easy job to devise and implement a scheme of such large ambitions.

Originally the deadline for this program was set for December 2022. However, due to a delay in implementation of the program, the deadline was moved up to December 2024.

As a result, till September 2023, only 11.89 million houses have been delivered, while originally 29.5 million houses were supposed to be delivered by 2022.

Other reasons for this shortfall in the delivery numbers and the delay include corruption in the bureaucratic system, shortage of land in urban areas, and a complex approval process for housing projects.

How is the Government Responding to these Challenges?

Some of the more imminent threats like corruption and delays are easier to handle while other problems like shortage of land and complex project approval processes require more effort.

For example, the financial inclusion scheme (Pradhan Mantri Jan Dhan Yojana) launched in 2014 is helping overcome the corruption problem at its roots.

Under the scheme, the beneficiaries now get their subsidies directly into their bank accounts. Hence, eliminating any need for the middlemen in the process. The government can now track the funds from its source to its destination.

Additionally, the scheme has also made it easier to identify where and why the affordable housing projects are delayed. Thus, increasing the accountability of the officials and the bureaucrats.

The government is also working to streamline the approval process for housing projects. The introduction of the Real Estate Regulatory and Development Act (RERA) is proving to be very helpful in this regard.

Under RERA, a number of safeguards are provided to the home-buyers to ensure that their interests are protected.

For example, developers are now required to disclose all relevant information about the project before launching it, including the timeline for the delivery and possession of the property. In case of delays in delivery, the homebuyers are also entitled to compensation from the developers for the financial or any other damages caused.

The Future of Affordable Housing for all

The Pradhan Mantri Awas Yojana has made significant contributions at both national and global levels.

At the national level, it is helping to address the housing shortage in the country and making a difference in the lives of millions of Indians.

On the other hand, the program has set a benchmark for the global powers for years to come.

The Program is indeed a testament to India’s commitment to inclusive growth.

It is also a significant program in terms of its potential to contribute to the achievement of sustainable development goals. As evident, the program has already helped reduce poverty, improve health and well-being, and promote sustainable inclusive growth.

In the end, I’d like to say that this visionary program is not only ambitious in its scale and scope but has also proven its mettle. And I hope, it will continue to do so in the future as well.