Pradhan Mantri Awas Yojana Urban: How this pet project of PM Modi can add 2 pct to GDP growth rate
|Nirupama Soundararajan & Aakanksha Shrawan
||17th November 2017
The Pradhan Mantri Awas Yojana (Urban), or PMAY (U), has been the talk of the town since its launch in June 2015, owing to its major welfare implications on urban population.
The Pradhan Mantri Awas Yojana (Urban), or PMAY (U), has been the talk of the town since its launch in June 2015, owing to its major welfare implications on urban population. Social welfare aside, the target of constructing 2 crore affordable houses by 2022, though not easy, will result in significant economic gains. First, it will create employment. Data shows that real estate is the second-largest employer after agriculture—PMAY (U) is expected to provide employment to 7.4 crore people by 2022, the largest amongst all the sectors. Second, it will trigger growth in private investment. For its implementation, an investment of Rs 3 lakh crore will be required. Affordable housing will also provide a fillip to core construction sectors such as steel and cement. However, data also suggests that the progress of the scheme is not encouraging, even though it has done better than its earlier avatar, the Rajiv Awas Yojana (RAY), under which 1,60,931 houses were approved but only 19,920 were completed, as of 2014. Under PMAY (U), 22,31,130 housing units have been approved and 1,37,186 have been completed, and the Centre has released funds worth Rs 11,452 crore. A completion rate of merely 16% seems to imply that these funds may have large opportunity cost in the future if the current situation continues. Based on numbers provided by the ministry of housing, of the 9,93,278 housing units that have been grounded so far, only 1,57,106 have been completed. Digging deeper we find that the problem stems from huge disparities between states...