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Simplifying PMAY & Government Efforts To Speed Up Implementation

Sep 06, 2017 12:09 PM

The Indian Government has set a very ambitious target under Pradhan Mantri Awas Yojana (PMAY) Urban to build 12 lac houses in the period 2017-18. Only 1.49 lac houses were built until 2016. The Centre has set a tall target of constructing 26 lac houses in 2018-19, 26 lac houses in 2019-20, 30 lac houses in 2020-21 and 29.80 lac houses in the period 2021-22. In order to meet such targets, the government must adopt an exceptionally sustainable and highly innovative urbanisation model that will become a model for the world.

Innovation & Sustainability The Key To PMAY’s Success

There are two major challenges that must be met. One, compress speed of construction and two, how to use technology. Other challenges such as scarcity of land, water and gas are also there. Niti Aayog CEO Amitabh Kant recently said that for the next four to five decades, India will witness greater urbanisation than she has witnessed in the past 5,000 years. Only innovative and sustainable urbanisation can help India achieve this dream. Experts have suggested the use of global technologies for affordable housing so as to reduce duration of construction.

Global Experts To Showcase Incredible Construction Technologies

Affordable housing is not possible if houses are built in three years. The massive rate of interest won’t make it feasible. Instead, Kant says that the affordable house must be constructed in three to four months and that is possible only with the use of global technology. A top government official has revealed that the Centre will soon be inviting global companies to showcase their construction techniques and technologies. Then it will select the ones most suitable to construct affordable houses for the Indian poor.

Global Experts To Compete In A Challenge To Speed Up PMAY

This move is very much in line with Government’s PMAY Urban initiative, which aims to provide “pucca” houses to every poor family by the year 2022. D S Mishra, who is the Housing and Urban Affairs Secretary, mentioned that there is a dearth of 1.2 crore houses in urban areas at present. Mr. Mishra even hinted at a possible “affordable housing construction technology challenge” that will complete housing projects in 90 days, instead of the current two to three years. Global construction technologies can make this possible.


Foreign Technology, Indian Material

The challenge will involve global firms using their technology and local material Indian material to build houses at minimum duration and minimum cost, at the same time, adhering to building norms present in India. A report on ET Realty states that the provider of technology will have to partner with private or public local firm. They will also be provided land at six or eight places where they have to demonstrate the superiority of their technologies. If implemented, this move would also inspire private builders to join the affordable housing initiative.

India To Have Advanced Construction Technology In 18 Months?

The Ministry is reportedly preparing the framework for challenge and has also organised a round-table meeting on the India Housing Construction Technology Challenge (IHCTC). Various stakeholders participated in the meeting. If everything goes according to plan, India will have global construction technologies within 18 months or so and that would be capable of building houses within a much shorter time. Moreover, global capital flow into Indian real estate is also set to increase.

How The Common Man Benefits From PMAY?

The PMAY is a nation-wide scheme that assures people that they can purchase affordable houses within their financial capabilities. Under this scheme, the economically weaker section (EWS) with annual income of below INR 3 lacs, and lower income group (LIG) with annual income of INR 3-6 lacs are eligible. However, they should not own any pucca house under their name or in the name of their family members anywhere across the country. These two sections of the society will benefit immensely from the PMAY scheme.

The scheme comes with the promise of greatly decreased rate of interest. Anyone from EWS or LIG availing a loan amount of up to INR 600,000 will have a 6.5 percent rate of interest to pay as against the current market rate of 10.5 percent. This drastically reduces the amount to be paid as EMI. The interest subsidy will be there for 15 years from the date the loan is dispersed. A subsidy will also be granted by the Central Government that will range between INR 100,000 to INR 230,000. This subsidy must be used only for purchasing a house under PMAY.

Aged and disabled homebuyers will get preference for the ground floor houses. Women will also be preferred during house allotment. As per the directives issued by the government, all houses constructed under the PMAY scheme must use eco-friendly construction technologies. Moreover, those from the EWS and LIG can also avail a loan if they already possess a house but needs renovation or extension. The loan can e availed if a person from these mentioned sections wants to build his own house and not one being constructed by the government.

For renovation and extension, the carpet area must be up to 30 square metres for EWS and up to 60 square metres for LIG. The loan would not be granted if this condition is not fulfilled. Broadly speaking, the PMAY scheme will contribute greatly to the development of slum areas. Private participation will help a lot in making things happen. When compared to previous housing schemes, PMAY has a subsidy of 6.5 percent compared to one percent in other schemes.

Women are at a 100 percent advantage, whereas with other schemes, the benefit was only up to 30 percent. In terms of grant to the beneficiary, PMAY’s figure is INR 1-2.3 lacs, compared to up to INR 75,000 for other schemes. For SC/ST, PMAY offers 100 percent advantage compared to up to 50 percent for other housing schemes.

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