Modi's PMAY Behind Schedule, Needs A Push To Meet Targets, Says ICRA
Prime Minister Narendra Modi’s 'housing for all' plan has fallen behind schedule and will need a substantial push in the next year and a half to meet targets, according to ICRA Ltd.
The government scaled down the combined target for rural and urban housing under Pradhan Mantri Awas Yojana to 3.26 crore from the original five crore homes, according to a note by ICRA. With a year and a half to go, the note said, the government has competed 67% of the revised PMAY-Rural target and 43% of PMAY-Urban.
It would require Rs 1.24 lakh crore over and above the allocation of Rs 47,500 crore for 2021-22 to complete the remaining units by December next year, the note said.
The government unveiled the 'housing for all plan' for urban areas in 2015 and extended it to cover rural India in 2016. And the target was to completed by the end of 2022.
Kapil Banga, assistant vice-president and sector head at ICRA, wrote:
Of 2.14 crore [earlier 3 crore] targeted homes under PMAY-R, India has sanctioned 1.95 crore and 1.41 crore are complete as of April. That implies completion of 67% of the revised target and 72% sanctioned units.
Against a revised target of 1.12 crore units [earlier 2 crore] under the urban plan, almost all have been sanctioned and 0.48 crore are ready. That means completion of the 43% of the near-term target and sanctioned units.
“A significant pick-up in the implementation pace for both, the PMAY-U and the PMAY-R, will be required to achieve the ‘Housing for All’ target by 2022,” he said.
The performance in FY22 is also likely to get impacted on account of the Covid-19 pandemic, ICRA said.
So far, the government has allocated 74% out of the total estimated requirement of Rs 2.88 lakh crore for the revised targets of PMAY-R as of May. And it has spent 53% of the Rs 1.81 lakh crore needed under PMAY-U.
Of an aggregate requirement of Rs 4.7 lakh crore, the government still needs to spend Rs 1.71 lakh crore, or about 37% of the expenditure, in the year and a half to complete the construction of the remaining units, Banga said.
Factoring in the allocation of Rs 47,500 crore in the budget estimates for the year through March 2022, ICRA said, it would require additional Rs 1.24 lakh crore to plug the gap by the end of next year.
According to ICRA, a considerable portion of cabinet-approved Rs 60,000-crore dedicated affordable housing fund—the National Urban Housing Fund—in 2018 to support the PMAY programme implementation has already been utilised. This has raised the need for more allocation.
“In the absence of a substantial ramp-up in budgetary allocation, the execution could continue to lag, while the dependence on extra budgetary resources is likely to remain elevated,” ICRA said. “The ability to provide the required extra budgetary resources to plug the gap would be critical to meet the financial spending and consequently the physical completion targets within the stated timeline.”