As of November 26, although 63 lakh houses had been sanctioned, only 12 lakh have been constructed, while 23 lakh are under construction.
If the government has to meet the target of constructing one crore houses in urban areas by 2022 under flagship Pradhan Mantri Awas Yojana - Urban (PMAY-U), it would have to raise around Rs 1 lakh crore over the next three years, according to rating agency CRISIL.
The scheme also faces challenges such as unavailability of land in prime areas, low participation of private developers on account of brand dilution, bidding mechanism, stringent cost and time schedules resulting in low yields, increasing construction cost due to absence of bulk sourcing of materials, and lack of new technology that impacts productivity, cost efficiency and quality. All these issues need to be addressed, it noted.
As of November 26, although 63 lakh houses had been sanctioned, only 12 lakh have been constructed, while 23 lakh are under construction. Among states, Andhra Pradesh, Uttar Pradesh, Maharashtra, Madhya Pradesh and Tamil Nadu together accounted for 55 per cent share of the sanctions, it said.
The government aims to sanction 75 lakh houses and construct 30 lakh of them by the close of the financial year 2019, the agency said.
The government needs to contribute Rs 1.5 lakh crore in seven years through 2022, at an average Rs 1.5 lakh per house, however, CRISIL said only 22 per cent of this, or Rs 32,500 crore, has been disbursed so far.
"Our calculations show the government will have to garner around Rs 1 lakh crore over the next three years if it has to achieve the target of building 1 crore houses. This is going to be a tall ask given the current fiscal arithmetic," said Prasad Koparkar, senior director, CRISIL Research.
Of the total central assistance, Rs 19,000 crore has been factored in the budgetary allocation till fiscal 2019. The balance would be met through future budget allocations and internal and extra budgetary resources, of which Rs 25,000 crore has been provided for fiscal 2019, the rating agency said.
For extra budgetary resources, the ministry has already initiated fund-raising (in the form of bonds) through entities such as the Housing and Urban Development Corporation Ltd.
The PMAY-U mission launched in 2015 has four verticals – In-situ Slum Redevelopment (ISSR), Affordable Housing in Partnership (AHP), Beneficiary-led Individual house construction or Enhancement (BLC), and Credit-Linked Subsidy Scheme (CLSS).Under the scheme, Economically Weaker Sections and Low Income Group beneficiaries can avail central assistance of up to Rs 2.67 lakh per house as provisioned under the different components of the scheme, while benefits to Middle Income Group are restricted to CLSS only.