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Budget 2018
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Housing ministry seeks three-fold increase in funding for flagship schemes in Budget 2018

The sought amount is nearly three-times the amount allocated last year

Vandana Ramnani @vandanaramnani1

The ministry of housing and urban affairs has sought an almost three-fold increase in budgets for its flagship programmes – Pradhan Mantri Awas Yojana (PMAY) and Smart City Mission.

It has proposed over Rs 20,000 crore for financing of the PMAY scheme and around Rs 15,000 crore for the Smart City Mission, sources said.

The central government plans to construct 1.2 crore houses for the urban poor under PMAY. So far, the construction of 37.5 lakh houses have been approved under the scheme. This is almost 33 percent of the total shortfall.

"The Housing and Urban Affairs Ministry has sought over three-fold hike in the allocation of funds for PMAY (U). The ministry had proposed Rs 20,000 crore for financing the scheme," sources said. Last year’s budget had allocated around Rs 6,000 crore for the scheme.

The ministry has so far sanctioned 3.7 million houses under the PMAY scheme, which is almost 33 percent of the total shortfall of 11 million. “Now if we move from 33 percent to the remaining one, obviously we will need more money but we will need the money as we go along,” Hardeep Puri, union minister of housing and urban affairs had told Moneycontrol on the sidelines of a workshop on Global Housing Construction Technology Challenge held in the Capital.

The government is also working on creating a housing fund to augment funding under these schemes, he said.

“If you succeed, you will need more. First of all the targets in PMAY, which the prime minister gave, was housing for every Indian citizen by 2022. We made an estimate, there was a 2011 study which said that there is a shortage of 18 million units but we had surplus in some areas. We made a calculation that probably the shortfall was about 10-11 million units. Our assessment of funds requirement is based on what we assess to be the housing requirement,” Puri had said.

“The government is also acutely conscious of the fact that large schemes like this cannot be based on funding only coming from the government. We need to devise innovative ways – maybe create a housing fund –we are already working on that and lot of advance work has been done,” he had said.

For smart cities, the minister said that the total number of cities in the country is 4041 but smart cities are only 90 till date after three rounds, the list of remaining 10 will be announced by January 26. “100 cities will require funds but more than that how can you have a situation in a democracy where the city next to yours is a smart city and you are not. There will be demands. We will have to incentivise that. If you want to be a smart city, then you have to prepare your own plans and your own infrastructure because these smart cities are also selected based on applications. We did not confer the status. The answer is clearly that we will need much more funds,” Puri said.

PMAY/Housing for All - Urban is a mission to provide housing for all by 2022 and is being implemented since 2015. It provides central assistance to Urban Local Bodies and other implementing agencies through States/UTs for in-situ rehabilitation of existing slum dwellers using land as a resource through private participation, credit linked subsidy, affordable housing in partnership and subsidy for beneficiary-led individual house construction/enhancement.

Under the PMAY(U), the total investment from the Centre and States/UTs is approved for Rs 2.03 lakh crore. Out of the approved total central assistance of Rs 57,669 crore, Rs 12,916 crores (approx) have already been released to States/UTs. Interest subsidy of Rs 1,646 crore on housing loans has been credited directly to 81,597 beneficiaries under CLSS (Credit Linked Subsidy Scheme).

So far, 37.5 lakh houses have been approved for funding under the mission. A number of 17.32 lakh houses have been grounded of which construction of 4.68 lakh houses has been completed since the launch of the mission.

To fast-track the construction of sanctioned houses, the housing ministry has also identified 16 new technologies for mass housing construction and further issued a schedule of rates for eight new construction technologies and building materials for adoption among States/UTs.

Under the Smart City Mission (SCM), 90 smart cities have been selected in three rounds based on an All-India competition. The process is on for the selection of the remaining 10 cities. Out of the 90 smart cities selected so far, 77 have incorporated Special Purpose Vehicle.

Under SCM, 2,864 projects worth Rs 1.35 lakh crore are in various stages of implementation. 148 projects worth Rs 1,872 crore have been completed; work is underway for 407 projects with a cost of Rs 15,600 crore. Further, tendering has started for 237 projects with a cost of Rs 13,514 crore and DPRs are being prepared for 2,025 projects worth Rs 1.02 crore.

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