Sheltering Dignity: Exploring the Hurdles in PMAY-U Implementation

Abstract

As India undergoes rapid urbanisation, the challenge of providing suitable, affordable, and quality housing has become more pronounced. This paper examines the housing challenges in urban India, emphasising issues of dispossession, prolonged resettlement waits, slum redevelopment challenges, and governance issues. The paper focuses on the Pradhan Mantri Awas Yojana (PMAY), arguing for its comprehensive reevaluation and innovative implementation of upcoming schemes. It explores the roots of informal settlements, the impact of unplanned urbanisation, and the struggles faced by the urban poor. It also analyses the existing housing policies and schemes, presenting recommendations for a more inclusive and sustainable approach.

Introduction

India’s population continues to grow and urbanise, and its cities face challenges in ensuring suitable, affordable, and quality housing (Mukhopadhyay, 2023). The United Nations projected that by 2050, approximately 68% of the global population will reside in urban areas (UN DESA, 2018). In line with this, the National Commission on Population’s 2020 report has projected a 57% growth in India’s urban population, rising from 377 million in 2011 to 594 million in 2036. Consequently, the urbanisation rate is expected to climb from 31% in 2011 to 39% by 2036 (Agarwal, 2020). Swift urbanisation presents Indian cities with housing shortages, insufficient infrastructure, and environmental degradation. As cities become hubs for commercial activities and infrastructure development, the urban poor, often engaged in informal labour, face increasing difficulties  accessing affordable housing.

Housing settlements in India can be broadly classified into formal and informal categories. Formal housing settlements, characterised by legal documentation and adherence to building standards, are a requirement for all households. In the current context, such settlements are predominantly limited to economically affluent households in the country (Jain et al., 2016). Conversely, informal settlements are witnessing an increase primarily to accommodate the urban poor. In India, slums cater to 17.6% of the urban population through ownerships and rentals. The slums documented only represent informal settlements with more than 300 households, and not all of them (Paul & Dhanuraj, 2016).

Due to rapid urbanisation, there has been a surge in street dwellers, slums, encroachments, illegal settlements, and an expanding shadow rental market. Unplanned urbanisation also exacerbates inequalities in accessing basic necessities like housing, water, sanitation, healthcare, and education (Chauhan, 2023). While not everyone lacks a house or shelter, the majority of households do not meet the legal documentation and living standards set by the formal housing system. Informal settlements are increasingly stigmatised as ‘illegal’ or ‘encroachers’ by all branches of the government, and homes of the urban poor in India are persistently demolished without due process, even when residents possess documents proving decades of residence. (Geetha & Narayan, 2022). 

Housing should focus on the habitual existence of people. Consequently, India’s housing challenge extends beyond providing shelter to the homeless; it revolves around how housing policies can foster the holistic development of households, socially and economically. This paper argues that the current housing crisis in urban India, marked by dispossession, prolonged wait for resettlement, slum redevelopment challenges and governance issues, demands a comprehensive reevaluation and implementation of the existing housing policy, with a singular focus on the Pradhan Mantri Awas Yojana (PMAY). By critically examining these issues, the paper recommends innovative, inclusive, and sustainable approaches that prioritise the dignity and well-being of the urban poor, transcending short-term election cycles and addressing the root causes of housing insecurity.

Why Do Informal Settlements Flourish?

Undoubtedly, India’s housing challenge is formidable, driven not only by the vast number of households but also the country’s complexity. Over the past seven decades, numerous attempts have been made by the postcolonial state to bridge the housing demand-supply gap (Sengupta et al., 2022). Post-1947, the growth of informal settlements surged alongside industrialisation in independent India. Labourer clusters mushroomed near mills, which expanded as more migrants joined. The housing demand spike raised the real estate prices in cities. Extreme poverty made city homeownership unattainable for many migrants, leading to the emergence of the rental market as a viable option (Paul & Dhanuraj, 2016). However, the Rent Control Act, meant to protect tenants, had unintended consequences because it offered minimal returns to property owners and made eviction challenging. This disincentivized property owners from renting or maintaining units, resulting in locked and dilapidated structures (Dev, 2006). Tenants eventually moved to informal settlements within the city, often on unoccupied public land. Over time, these settlements developed informal systems mirroring some formal processes, including records of ownership and property transaction documents.

The absence of official land records made eviction impractical, ensuring tenure security for informal settlers and attracting more households to these settlements. Recognition of these informal settlements and the provision of basic services motivated landlords to consolidate and expand. In turn, this spurred the formation of numerous other informal settlements, with expectations of future regularisation of tenure and service provision (Arroyo, 2013). Simple procedures for transferring informally acquired property rights and renting informal property encouraged the poor to join these settlements. These settlements were often retained as influential vote banks in politics (Paul & Dhanuraj, 2016). While informal settlements are the simplest choice among the urban poor, they come at a relatively high cost, including bribes to local individuals such as thugs, politicians, and the police. These settlements also entail significant uncertainty about the future, potentially resulting in a complete loss of their investment in the house.  

Impact on the Urban Poor

According to the Ministry of Housing and Urban Poverty Alleviation’s (MHUPA) 2012-17 report, 95% of the housing shortage affects the Economically Weaker Sections (EWS) and Lower Income Groups (LIG). Distress migration from rural areas further intensifies this demand, leading to the proliferation of informal settlements  (Das et al., 2023). Many migrants, notably casual and daily-wage labourers, remain without legal and permanent homes. Despite the allure of cities promising a better quality of life, the reality often involves residing in slums, squatter settlements, or peri-urban spaces (Chandhoke, 2022). As of the 2011 census, more than 65 million people, about 5 per cent of India’s total population (17 per cent of the urban population), resided in slums. In urban areas, unsold housing units coexist with a homeless population enduring subhuman conditions. Health issues from inadequate sanitation compound challenges for a significant proportion of urban dwellers. 

Affordable housing, a term often ambiguous despite its widespread usage, poses challenges for the urban poor, who allocate a significant portion of their income to housing. The lack of affordable homes leads to multifaceted deprivation, pushing households to unsafe areas, while unallotted houses are plentiful (ICRIER, 2023). Table 1 lists the major urban housing policies existing in India over the past two decades:

Table 1: List of Housing Schemes and their Objectives

The Indian government has not specified a price ceiling for a house to be considered ‘affordable’ under the PMAY (U) scheme. To qualify, the dwelling must meet certain criteria:

1. EWS and LIG houses should have maximum carpet areas of 30 sq m and 60 sq m, respectively, along with basic infrastructure and services. 
2. Eligible buyers must belong to households with an annual income not exceeding INR 300,000 (for EWS homes) and INR 600,000 (for LIG homes) (MoHUA, 2021).

Schemes like Rajiv Awas Yojna (RAY) and Pradhan Mantri Awas Yojna (PMAY) mark the shift to public-private partnerships, allowing 100% Foreign Direct Investment (FDI) and framing slum redevelopment as a Corporate Social Responsibility (CSR) activity to attract private funding. This market-friendly approach lacks safeguards for marginalised populations, especially those with urgent housing needs (Indo-Global Social Service Society, 2021). While the ‘state-enabled but market-driven’ housing strategies focus on producing new units, the challenge of timely delivery to intended beneficiaries remains largely unaddressed. Between February and July 2022, Delhi experienced numerous home demolitions primarily carried out by central government authorities. There was no resettlement despite the families remaining at the same site post-demolition. The city also saw multiple eviction cases that contradicted the government’s commitment to providing in-situ housing for informal settlement dwellers and achieving the goal of Housing for All under PMAY (Housing and Land Rights Network, 2021). Key findings from Haque et al. ‘s (2022) study reveal a prolonged time gap between provisional allotment letters and house delivery, emphasising the struggles and prolonged waiting of eligible basti (slum) residents. 

Despite the introduction of various policies and schemes, concerns about their effectiveness in addressing underlying problems persist, which will be addressed in the following sections. Collaborative efforts of the government and the private sector struggle to match the growing demand for affordable and accessible housing for the urban poor. The prevailing policies and incentives appear insufficient to garner substantial interest from the private sector, as per the Reserve Bank of India (RBI) in January 2018. The extended timelines associated with affordable housing programs not only amplify cost sensitivity but also impede the adoption of innovative construction practices due to a dearth of skilled manpower. Moreover, private sector players operate within regional silos, constraining their capacity for more extensive engagement in the affordable housing sector. The introduction of regulatory frameworks like the Real Estate (Regulation and Development) Act (RERA) further compounds the challenges faced by private entities (Deloitte, 2016). These multifaceted issues collectively contribute to the complexities surrounding private sector involvement in affordable housing initiatives.

                                                                                                           Housing for All: Challenges to Implementation

On October 4, 2023, newspapers reported that the Expenditure Finance Committee (EFC) approved a new affordable housing scheme, providing an interest subsidy of Rs 60,000 crore on home loans for the urban poor over five years, with a 3-6% interest subsidy on loans up to Rs 50 lakhs (Garg, 2023).

As seen in Table 1, the government has existing initiatives to address urban housing shortages for the economically disadvantaged, mainly the Pradhan Mantri Awas Yojana Urban (PMAY-U). The Mission has been extended until December 2024, and the data shows that ‘Housing for All’ remains elusive (The Hindu Bureau, 2023). The Union Budget 2023-24 acknowledged the importance of supporting the development of smaller tier 2 and 3 cities and allocated over ₹79,000 crore for PMAY as compared to the 2022-23 allocation of ₹48,000 crore (Chakrabarty, 2023). A report by the Comptroller and Auditor General of India (CAG), however, indicated delays, inadequate planning, and poor progress monitoring in fund utilisation (TNN, 2023).

PMAY faces criticism for the significant delays in achieving its ambitious targets. The initial housing deficit identified in 2012 has not been adequately addressed, and the pace of construction is far below the set goals. Concerns have been raised about missing houses, and there are calls for transparency through the presentation of pictures and beneficiary details to verify the actual progress (Sengupta & Mavi, 2023). The incomplete achievement of goals and further extension, despite a substantial central assistance commitment of ₹1.8 lakh crore, raise concerns about PMAY-U, its impact and effectiveness in meeting housing needs.

In the last eight years of PMAY-U, only 76.25 lakh houses out of 1.19 crore were completed or handed over as of August 14, 2023. The central assistance amounted to ₹1.48 lakh crore, with the Centre contributing 24.4% and states and urban local bodies contributing 16%. Beneficiaries are expected to contribute nearly 60% of the funding, amounting to ₹4.95 lakh crore, out of the estimated total investment of ₹8.31 lakh crore for the initially proposed 1.23 crore houses.

The timely completion of houses is significantly influenced by the release of central financial assistance and the economic conditions of beneficiaries, as they are also required to contribute. Construction costs, labour, and capital costs are also not adequately considered, contributing to hidden subsidies and adding to the national debt (Prabhakar, 2021). Beneficiaries of PMAY also bear the brunt of hidden expenses (Anparthi, 2022). During the COVID-19 lockdown, many families experienced a significant decline in income, making it challenging for them to contribute to house construction costs. States and union territories (UTs), including Bihar, Haryana, Mizoram, Manipur, Puducherry and Sikkim, have less than 50 per cent completion rates; hence, the pace of delivery is slow (Aijaz, 2022).

The Credit Linked Subsidy Scheme (CLSS) component falls short for private housing in tier-I cities due to high housing and land prices (Deshpande, 2023). EWS housing projects, particularly those built by state governments, incur additional costs beyond CLSS subvention. Housing projects also face issues such as distant locations from economic centres and a lack of transport connectivity, which may also lead to low demand for the housing units (Johari, 2018). This leads to loss of livelihoods and disrupted social structures. They worsen economic and social vulnerabilities, compounding existing challenges in accessing rights to housing, land, health, work, water, sanitation, privacy, and security. Families await rehabilitation for years, facing obstacles such as court-ordered delays and government scheme implementations, leaving them in inadequate living conditions (Housing and Land Rights Network, 2021).

Allegations of discrimination based on political affiliation have also surfaced, impacting the distribution of benefits, particularly in states where there is a political divide between the central and state governments (Das, 2023). The Centre-State tussle results in different states prioritising their own schemes over PMAY, affecting the overall success of the program (Sikdar, 2023).

The PMAY scheme has also been criticised for its heavy reliance on documentation, excluding many marginalised groups such as the homeless, landless individuals, trans persons, and others who may not meet the stringent eligibility criteria (Sengupta & Mavi, 2023). The lack of transparency and accountability in beneficiary identification processes has raised concerns about the fair distribution of funds. The reliance on 2011 census data for understanding housing needs raises concerns, emphasising the need for updated figures. The allegations of poor implementation, coupled with corruption charges, highlight the urgency for a comprehensive reform of PMAY.

The Affordable Rental Housing Complex (ARHC) scheme, which is also now a part of PMAY generated excitement initially, but there are concerns about its implementation pathways, target beneficiaries, and the gap between housing supply and demand (India Housing Report, 2021). 

The ARHC scheme involves concessionaires in both of its models (see Table 1 for the models). The scheme allows the repurposing of vacant housing built under previous national housing schemes for rental purposes. The concessionaire is contracted to repair and refurbish the existing vacant housing, which is then provided on rent for a specified period of 25 years. The scheme also encourages private and public sector entities, acting as concessionaires, to develop rental housing. The eligibility for repurposing is not based on a clear definition of ‘vacancy’ but rather on the housing being vacant ‘‘after all efforts to allot them to eligible beneficiaries’’. As of March 2021, around 90,000 houses under construction are also eligible for utilisation in the ARHC scheme. This expansion further showcases the profit-oriented nature of the scheme by maximising the use of available housing resources (Harish, 2021). Hence the scheme may favour salaried and formal workers over the intended beneficiaries. Quality and location issues of existing government housing stock further raise doubts about the viability for urban poor and migrant workers.

Other challenges include inadequate or improper selection of land parcels, prolonged statutory clearance and approval processes, and challenges in planning and project design, including mechanisms for maintenance. The typical affordable housing program faces a prolonged approval process, requiring 20-30 clearances over two years before construction commencement. This extended statutory procedure hinders timely delivery, widening the gap between rising housing demand and slow supply. Additionally, complex and cost-intensive processes for land use conversion, involving multiple levels of No Objection Certificates (NOCs), contribute to increased land prices. Capacity constraints, including insufficient technical capabilities of implementing agencies and a lack of mainstreaming low-cost technologies to reduce overall costs, further complicate the scenario (Elets News Network, 2021).

Moreover, the scheme faces difficulties in attracting private developers for affordable housing projects, with some private builders violating the pre-condition of reserving houses for Economically Weaker Sections (EWS) in affordable housing projects (Aijaz, 2022). The issue of low affordability among a large number of people persists, and there is a challenge related to the sale of houses by some beneficiaries after obtaining possession. Addressing these issues requires policy changes, including ensuring an adequate supply of land, efficient land use policies, and reducing transaction costs associated with land/property purchases. While PMAY-U addresses an important gap in affordable housing, there is a need for long-term and permanent solutions to ensure the sustainability and effectiveness of the scheme.

Governance and the Urban Housing Crisis: The Case of  Karnataka and Tamil Nadu

• E Karnataka

In Karnataka, the challenges to implementation of the Credit-Linked Subsidy include (Suvarna & DHNS, 2022):

1. Beneficiary Contribution and Loan Issues: The housing schemes require a greater contribution from beneficiaries (10% to 66%), leading to financial burden on individuals, who may end up taking substantial loans to afford a house. The stringent documentation requirements of banks, demanding income certificates and proof, have resulted in fewer loans being disbursed.
2. Lack of Coordination and Overlapping Schemes: Lack of coordination between government bodies and overlapping implementation of schemes for the poor has resulted in delays, leaving evicted families in inadequate living conditions while waiting for rehabilitation.
3. Limited progress in the on-site development of slums: The on-site development of slums under PMAY has advanced slowly, with only 14% of the planned low-income houses built in Karnataka. The focus seems to be shifting away from low-income communities to those slightly better off.
4. Insufficient Funding for Basic Facilities: The Karnataka Slum Board faces challenges in providing basic facilities due to inadequate funding, leading to the risk of new projects turning into slums.
5. Lack of Awareness and Cooperation: Some challenges arise from a lack of awareness and cooperation, with potential beneficiaries not fully understanding the loan requirements or showing interest in the schemes.

• Tamil Nadu

Tamil Nadu, too, faced a myriad of challenges in implementing its State housing scheme along with PMAY-U (TNN, 2023): 

1. Delay in Policy Framing: The Tamil Nadu Urban Habitat Development Board (TNUHDB) faced criticism for delaying the framing of the Tamil Nadu Affordable Urban Housing and Habitat Policy and preparing the Housing for All Plan of Action (HFAPoA). This delay was deemed detrimental to the objectives of the PMAY-U and led to urban poor living in unhygienic conditions. The failure to do so resulted in delays in addressing key housing schemes, including private partnership and financing.
2. Incomplete Housing Demand Fulfilment: Against a total housing demand of 13.92 lakh, TNUHDB obtained sanction for only 7.08 lakh houses during 2015-21. Out of these, 3.44 lakh houses were completed, and the remaining 3.64 lakh houses were under different stages of construction.
3. Non-Implementation of Credit-Linked Subsidy Scheme: The government clarified that 4.84 lakh housing demands pertained to the credit-linked subsidy scheme, which was not being implemented by TNUHDB. This contributed to the gap in fulfilling the overall demand.

Recommendations

Urban areas vary widely in size, ranging from over 15 million to a few thousand people, reflecting diverse state geographies, economic levels, and local settlement history. This diversity underscores the inadequacy of ‘one-size-fits-all’ policy solutions. Standalone policies for low-income households are insufficient (ICRIER, 2020). Housing quality and quantity are determined by a household’s permanent income, shaped by factors like health, education, and livelihood access. To ensure comprehensive support, initiatives like social rental housing should be complemented by provisions for schooling and essential services like safe drinking water, sanitation, and waste management. Achieving a sustained increase in housing consumption requires convergence among schemes, emphasising a holistic approach that goes beyond traditional price-based housing policies.

The government should carefully examine the Parliamentary Committee Report’s well-considered suggestions on the implementation of PMAY-U as it formulates any new housing scheme (The Hindu, 2023). The committee’s most significant recommendation advocates abandoning the uniform and fixed assistance model used in PMAY-U, favouring a flexible arrangement based on the area and other relevant factors. Furthermore, the committee urges an investigation into the causes behind the poor quality of houses and the prevalence of unoccupied houses. High land costs, floor space index restrictions, and the need for multiple certifications from various agencies are key determinants of urban housing success. To address these issues, the committee suggests engaging in discussions organised by the central government with relevant stakeholders, including state governments, local bodies, urban planning bodies, urban sector professionals, financial institutions, and activists. 

Effective monitoring and evaluation mechanisms, transparency, and accountability, along with active participation from stakeholders, are also required. Adopting a collaborative approach between the central and state governments, encouraging states to drive change and implement reforms, is crucial for sustainable development. Empowering local bodies with financial autonomy aligns schemes with development initiatives. The budget should prioritise capacity building for citizens and communities and fostering public participation in development projects. While global best practices can be adapted, empowering individual states is vital for sustainable development.

Conclusion

The urban housing crisis in India is multi-faceted, involving issues of dispossession, governance challenges, and the struggle for dignity in housing. Despite numerous policies and schemes, the urban poor continue to face hurdles in accessing affordable and quality housing. The case studies of Delhi, Karnataka, and Tamil Nadu illustrate the varied implementation challenges and highlight the need for a comprehensive reform of existing schemes. While ambitious, the Pradhan Mantri Awas Yojana faces criticism for delays, discrimination, and reliance on outdated data. Recommendations include a flexible assistance model, active stakeholder engagement, and empowering local bodies for sustainable development. As India’s urban population grows, addressing the housing crisis requires innovative, inclusive, and transparent approaches that prioritise the well-being and dignity of the urban poor.