Category Archives: Pradhan Mantri Awas Yojana Coverage

In 2020, I reviewed the progress of the scheme in Maharashtra in metro cities and small towns to find that there were several issues and roadblocks in its implementation which were leading to hardships for the beneficiaries.

Homing in

This is a brief review of the ground-reporting done by me in 2020 to gauge the progress of Pradhan Mantri Awaas Yojana (Urban) in Maharashtra’s cities and towns.

I found that though the scheme, being implemented through the urban local bodies (ULB), was extremely popular, it’s execution was plagued with several issues which were further compounded by the challenges thrown in by the pandemic, with beneficiaries having to deal with bureaucratic red tape, loss of income as they struggled to build a new home.


Pradhan Mantri Awas Yojana (Urban) aims to change the urban residential landscape of Indian cities and towns by providing homes to the urban poor and by aiding others to buy their first home by subsidizing housing units.

The scheme is being implemented by the union government through urban civic bodies, namely Municipal Corporations, Municipal Councils, and Nagar Panchayats.

One of the flagship schemes of Prime Minister Narendra Modi, PMAY(U) started in 2016 with a stated aim to provide ‘housing to all’ by 2022.

It is one of the biggest welfare schemes ever undertaken by the Government of India, in terms of the amount of the grant, number of intended beneficiaries, overall financial allocation (also the political goodwill it can potentially generate for a political regime that undertakes such a welfare project), and the interest it generated among the intended beneficiaries, especially among the urban poor.

Under its most popular vertical – the beneficiary-led construction or BLC – the beneficiary family receives a total of Rs 2.5 lakh in government subsidy – Rs 1.5 lakh from the union government and Rs 1 lakh from the state government – to build the house on an owned plot. In the metro cities, civic bodies undertake housing projects in partnership with private builders and make the homes available to the urban poor at discounted rates (Rs 8 -10 lakh/house). In the latter case, Rs 1.5 lakh/DU PMAYU subsidy is transferred to the builder.

I reviewed the scheme at both these levels) at the level of the municipal corporation (Pune) where PMAY’s Affordable Housing in Partnership (AHP) component was the most popular vertical, and b) at the municipal council level (in Pathri, Hingoli and Jintur towns of Marathwada) where beneficiary-led construction (BLC) vertical of PMAYU was the most prominent.

Travelling across several districts of Marathwada, I visited cities and towns to speak to the beneficiaries who were allotted homes under the scheme and civic officials who were supervising the scheme.

I found that most homes sanctioned under PMAYU’s biggest and most popular vertical (Beneficiary Led Construction) in which beneficiaries are responsible for constructing the house on their own using the subsidy amounts, remained incomplete due to delays in the release of promised subsidy funds – especially the central government component.

In fact, in many cities and towns of the state, unfinished homes had become a common sight. The delay in completion of the construction and the financial hardships caused by staying in rented accommodations imposed a big emotional cost on the beneficiaries which the state or the media has no way of calculating. The ongoing pandemic made things worse for the affected:

Pradhan Mantri Awas Yojana subsidy delayed, thousands of beneficiaries forced to live in shanties or half-finished houses

APART from the legwork that I did for ground reporting, I also filed several Right To Information petitions with the local civic bodies, the state government, and the Union Urban Development Ministry to obtain data as well as to bring to the fore how the bureaucratic apathy and red-tape was affecting the effective implementation of the scheme.

The documents obtained through RTI showed that the state government and central agencies were in communication with each other for months over the issue of release of funds and were engaged in a blame-match while the beneficiaries continued to suffer:

Maharashtra: As PMAY (U) beneficiaries wait for funds, state, central agencies in a war of words

SOON after the publication of these news stories, the Hingoli Municipal Council received a pending central subsidy of Rs 3.33 crore (thus bringing reprieve to about 250 beneficiaries), Pathri Municipal Council received Rs 5 crore ending the wait for over 400 beneficiaries.

After the reports, MHADA, the agency implementing PMAY(U) in the state, also changed its fund distribution norms so that subsidy funds are not diverted by the beneficiaries for other purposes:

Show construction progress to avail PMAY funds: Maharashtra civic bodies

The situation in big cities – for instance, Pune – was not any different. It was found that the beneficiaries of the Affordable Housing in Partnership (AHP) vertical were facing a different but equally pressing conundrum.

In Pune, houses built for the urban poor (lower-income and middle-income groups) by Pune Municipal Corporation were found to be too small (350 square feet carpet area) which led to many beneficiaries who were initially enthusiastic about the scheme forgoing the allotment. In this case, the civic authorities and the union urban development ministry failed to notice a mismatch between the aspiration of the urban poor and the facilities being offered to them under the scheme. In many cases, the loss of employment during the pandemic curtailed their ability to pay for the allotted homes or obtain bank loans.

Financial troubles, tiny houses: Why many PMAY allottees rejected the offer

Even after a second round of allotment as many as 63 per cent of flats on offer remained unclaimed.

Pune: 62% PMAY homes remain unbooked after second round of allotment

The civic body later decided to allot the about 850 unsold flats to the staffers of Pune Mahanagar Parivahan Mahamandal Limited (PMPML) which it partially controls.

Unable to sell flats to intended beneficiaries, PMC moves to allot PMAY(U) flats to PMPML staffers

Unable to sell flats to intended beneficiaries, PMC moves to allot PMAY(U) flats to PMPML staffers

As per PMC officials, of the total 2918 flats constructed to be allotted under PMAY(U) for deserving poor families, about 850 flats still remain unsold, after two rounds of allotment and opening up for the general public who had not made the application initially.


After failing to find customers from among the common citizens to buy the flats constructed by Pune Municipal Corporation (PMC) under Pradhan Mantri Aawas Yojana -Urban (PMAY-U), the civic body has now decided to allot the about 850 unsold flats to the staffers of Pune Mahanagar Parivahan Mahamandal Limited (PMPML).

As per PMC officials, of the total 2918 flats constructed to be allotted under PMAY(U) for deserving poor families, about 850 flats still remain unsold, after two rounds of allotment and opening up for the general public who had not made the application initially.

Of the three sites – namely, Hadapsar, Kharadi and Vadgaon Khurd – most of the unsold flats are at Hadapsar (three proposed buildings in Hingane Mala) and Vadgaon Khurd areas.

The unsold flats will now be allotted to PMPML staffers and the civic body has also received about 1300 applications from the hopefuls, of which 661 applications were found eligible for allotment.

“There are about 150-200 applications of the PMPML staffers which have minor deficiencies and can become eligible for allotment after we receive supplementary documents,” said Dinesh Rokade, Joint-Director in-charge of implementation of PMAY (Urban) in PMC.

Under Affordable Housing in Partnership (AHP) vertical of PMAY(U), PMC has taken up the development of five housing projects comprising of 2,918 apartments at three different locations in the city namely Hadapsar, Kharadi and Vadgaon Khurd. When the civic body started receiving the applications in 2017, over 40,000 hopefuls from EWS families had applied to benefit from the scheme. In October 2020, PMC announced the first list of beneficiaries by drawing a lottery, and asked them to book the homes – cost ranging between Rs 8.4 lakh to Rs 10.2 lakh – by paying 10 per cent booking amount within a month. However, at the end of this period, only 731 individuals claimed the homes (although about 1400 of them had collected the provisional allotment letters from the PMC) while the rest gave the opportunity a pass.

On December 7, the PMC published another list of 2187 fresh allottees from the waiting list. By January 6, when the deadline to book the home came to an end, only 357 of them had booked the offered home.

At the end of the second round of allotment by the end of January 2021, a total of 1830 homes still remain unbooked as allottees did not come forward to book the flat by paying 10 per cent of the cost.

Following this, the PMC opened up the homes to anyone who fulfils the EWS criteria (income less than 3 lakh per annum and not owning a house anywhere in Maharashtra) and had not applied to benefit under the scheme. Even after the end of this round, about 850 apartments remained unbooked.

Pune: 62% PMAY homes remain unbooked after second round of allotment

As reported by The Indian Express earlier, under the vertical of affordable housing in partnership (AHP) under PMAY(U), the PMC has taken up the development of five housing projects comprising 2,918 apartments at three different locations in the city, namely Hadapsar, Kharadi and Vadgaon Khurd.

A beneficiary who has been picked through the lottery drawn by Pune Municipal Corporation (PMC) at the construction site in Kharadi. (Photo Credit: Atikh Rashid)

HOUSES BEING constructed by the PMC under Pradhan Mantri Awas Yojana (Urban) for economically weaker families are finding few takers. At the end of the second round of allotment, as many as 1,830 houses have still not been booked as allottees selected via the lucky draw have not come forward to book the flat by paying 10 per cent of the cost.

As reported by The Indian Express earlier, under the vertical of affordable housing in partnership (AHP) under PMAY(U), the PMC has taken up the development of five housing projects comprising 2,918 apartments at three different locations in the city, namely Hadapsar, Kharadi and Vadgaon Khurd.

When the civic body started receiving applications in 2017, more than 40,000 hopefuls from economically weaker families applied for the scheme. In October 2020, the PMC announced the first list of beneficiaries by drawing a lottery, and asked them to book the homes –ranging between Rs 8.4 lakh and Rs 10.2 lakh – by paying 10 per cent of the booking amount in a month. At the end of this period, however, only 731 applicants claimed the homes, although about 1,400 of them collected the provisional allotment letters from the PMC). The rest gave the opportunity a pass.

On December 7, the PMC published another list of 2,187 fresh allottees from the waiting list. By January 6, when the deadline to book the home ended, only 357 of them booked the offered home. Thus, at the end of two rounds, 1,830 (62 per cent) were not allotted.

According to officials, most of the dwelling units (DU) that have not been booked are at three sites in Hadapsar’s Hingane Mala. In this area, which already has over a dozen slum rehabilitation buildings and do not have proper access roads, the PMC is constructing 1,024 DUs in three different projects.

Also, unlike the two other sites, namely in Kharadi and Vadgaon Khurd, the work has not physically commenced and allottees are finding it difficult to envisage how the building and the apartment would look. At these sites, however, beneficiaries are visiting the ongoing work and can take a look at the sample flat and possible amenities in the building and the locality.

“Most of the apartments that have not been booked are from the Hadapsar sites,” said a staffer at the PMC’s PMAY(U) cell.

While the allottees of the two other sites are satisfied, the difficulty in getting a home loan is proving to be an issue for many families, especially in those where the income comes from unorganised sectors. Major banks are turning them away for lack of income proof, compliance with income tax rules and good credit history and private finance firms are charging a hefty interest rate.

A rickshaw driver, who has been allotted a home in the Kharadi project, said, “Nationalised banks charge 6.9 per cent interest on home loans. They are refusing us loans for lack of documentary evidence of income, and the interest rates offered by private finance companies are too high – ranging from 9 per cent to 12 per cent. These firms are also notorious for harassing and abusing customers even if there’s a minor issue in repayment. Considering everything, I’m confused if I should go ahead and book the home or let it go.”

Dinesh Rokade, joint-director in-charge of PMAY(U) in the PMC, said Additional Commissioner Rubal Agarwal held a meeting with representatives of nationalised banks, requesting them to make the process of getting loan easier for EWS beneficiaries.

“The bank officials, however, conveyed that they are bound by guidelines of RBI (Reserve Bank of India) and won’t be able to lend to those without requisite documentation or with default on a previous loan,” said Rokade.

Rokade said the civic body was considering giving another chance to applicants in the primary list or the waiting list but could not make the booking within the deadline due to logistical reasons. “We are still compiling the lists of allotments and vacancies and, once that gets finalised, senior officials will take a call in this regard,” he added.

While PMAY(U) beneficiaries suffer, state & central agencies Caught up in war of words

The correspondence between Union Ministry of Housing and Urban Affairs (MoHUA) and Maharashtra Housing and Area Development Authority (MHADA), obtained by The Indian Express using the RTI, shows that there has been little progress towards resolving the issue although both the agencies acknowledge that poor families are badly suffering due to the delay in release of central subsidy.

Naseem Bano, a widow from Parbhani district, is among the PMAY(U) beneficiaries who are awaiting release of the central subsidy to complete the construction of their houses. (Pic: Atikh Rashid)

As Pradhan Mantri Awaas Yojana (Urban) beneficiaries in Maharashtra, especially those from Economically Weaker Sections (EWS), continue to suffer due to the delay in the release of central subsidy, the state and central agencies are blaming each other, documents obtained by The Indian Express under the Right To Information Act show.

As reported by the Express earlier, a total of 2.19 lakh houses have been sanctioned in the state under Beneficiary Led Construction (BLC) vertical of PMAY(U), in which each beneficiary family receives Rs 1.5 lakh from the Centre and Rs 1 lakh from the state.

In Maharashtra, of the total sanctioned houses since 2016-17, only 18,665 have been completed, while construction of 63,415 is stuck in various stages owing to non-release of subsidy funds by the Centre. In most cases, the construction has reached up to lintel level and the dwelling units are standing roofless.

In the remaining 1.2 lakh sanctioned cases, no progress has been seen despite the release of the first instalment of funds. This state officials reckon, could be because of financial hardships caused by Covid-19 to the EWS families, who may have diverted the funds towards basic needs.

As reported earlier, many BLC beneficiaries in the state, who had started the construction a year or two ago, have given up hope of finishing the work, owing to the prolonged delay in the release of Rs 1.5 lakh central subsidy. They have laid old tin sheets over the newly constructed walls so they can move in. In the most precarious condition are those who had demolished an existing kutcha house and had moved into a rented home.

Express spoke to many such families in Parbhani, Hingoli and Beed districts, who have spent a considerable amount on rent and are now repenting their decision to demolish the existing house in the hope of a better house.

While both the agencies – the Union Ministry of Housing and Urban Affairs (MoHUA) and Maharashtra Housing and Area Development Authority (MHADA), the nodal agency for implementing PMAY(U) in the state – told the Express that the delay was caused by the pendency in the submission of Utilisation Certificates (UCs) by Urban Local Bodies (ULBs) and the issue will soon be resolved, documents obtained under RTI Act show that the two agencies have been corresponding since March 2020, but the issues causing the delay in the release of pending funds are far from resolved.

Letter from Maharashtra Principal Secretary (Housing) SVR Srinivas to PMAY(U) Mission Director Amrit Abhijat on November 2 2020.

On March 4 2020, Rishi Kumar (Director-HFA-IV) had written to Sanjay Kumar, Additional Chief Secretary (Housing), Maharashtra, informing him that senior officials in MoHUA and Finance Ministry were in favour of halting the release of central funds in light of non-submission of UCs by states for funds released earlier.

The MoHUA followed up on October 7, 2020, when Amrit Abhijat, Mission Director, Housing For All, wrote to SVR Srinivas, Principal Secretary (Housing), Maharashtra. “So far, an amount of Rs 803.55 crore has been released to Maharashtra against which we have received UCs for Rs 127.16 crore only. As per General Financial Rules, UCs for amounts released prior to 31.3.2019 have become due and without the receipt of these, further release of funds is held up,” wrote Abhijat.

In his response dated November 2, Srinivas blamed the MoHUA for not following PMAY(U) guidelines, and releasing only a part of the amount it owes to the state towards the first instalment of houses sanctioned under BLC and AHP (Affordable Houses in Partnership) and ISSR (In-Situ Slum Rehabilitation) components in the state. He said that since ULBs were busy in Covid-19 management for the better part of the year, they should be given time to submit the pending UCs.

As per him, with a total of 7.40 lakh dwelling units sanctioned in the state under BLC, AHP and ISSR components of PMAY(U), the state should have received 40 per cent (Rs 4433 crore) of the total subsidy amount for these DUs as the first instalment.

“Contrary to the PMAY (U) guidelines, instead of releasing the entire first instalment of Rs 4,433 crore which is due to the state, the MoHUA has insisted the utilisation certificates for the 70 per cent for the partial amount released from the first instalment,” wrote Srinivas.

He said that the state government has been receiving demands from ULBs for release of pending funds and delay in the release of funds has caused “unrest among the beneficiaries”, especially those from EWS sections.

On December 18, Abhijat wrote back, reiterating that the state government will have to submit UCs worth Rs 324.87 crore to MoHUA before further funds are released. By this time, the UCs received by MoHUA had gone up to Rs 211.94 crore (from Rs 127 crore in March 2020). In this letter, Abhijat raised several other fresh compliance issues, including AADHAR seeding of the beneficiaries into the PMAY(U) portal, action taken report on the recommendation of the third party quality monitoring agencies, geo-tagging of the current stage of the constructions, among others.

“Therefore, I would request that all thus compliances may be done as soon as possible and come up with the proposal to release further funds to the state,” wrote Abhijat.

When reached for a comment, officials with MoHUA and MHADA, requesting not to be named, said that they were working to resolve the issues at the soonest.

Financial troubles, tiny houses: Why many PMAY allottees rejected the home offer

In October 2020, PMC had alloted affordable houses being constructed under PMAY(U) to 2,918 poor families but only 731 of them claimed them. Now PMC has announced names of 2,187 fresh allottees urging them to book the unclaimed homes.


In August 2017, Babaram Bhagne (53), a helper at an automobile spare parts shop in Nana Peth, was among the 40,000 hopefuls from economically weaker families who had given applications to claim low cost homes being built under Pradhan Mantri Awas Yojana (Urban) in Pune city.

In October 2020, he was among the happy club of 2,918 applicants who were declared ‘winners’ to get the homes being built by Pune Municipal Corporation (PMC) with assistance from private builders at five different locations in the city.

Two months later, he is one of the 2,187 individuals who have decided to let go of this ‘opportunity’. On Monday, PMC’s PMAY (U) cell posted a list of new ‘winners’ from the waiting list who will now have a chance to lay claim over the homes that remained unclaimed in the first round.

“On the day our name was announced in the lottery, we were told to pay up Rs 1.02 lakh (10 per cent of the total price of the apartment) within a month. I had no income from March to October 2020 as the automobile shop I work for was shut due to the lockdown. It was extremely difficult for me to arrange the sum within such a short time,” said Bhagane, who presently stays in a rented home in Sukhasagar with wife, a son and a daughter. He said that getting a housing loan for payment of the total cost (pegged at Rs 9.67) lakh was difficult due to break in employment.

But that wasn’t the only reason he let go of the home offer. “At 350 square feet carpet area, the apartment is too small for my family. My son has finished his graduation this year and very soon we will start thinking about his marriage. Once our family expands, this house will be too tiny for us. Hence, we thought and decided that instead of taking a loan to pay for this small flat, we will wait for an opportunity to buy a bigger home once my son starts earning,” said Bhagane.

The houses are being built for economically weaker sections (EWS) under Affordable Housing in Partnership (AHP) component of the Pradhan Mantri Awas Yojana (Urban). Under this component, the central and state assistance is provided to housing projects where 35 per cent homes are reserved for EWS customers and are made available to them at an affordable rate.

Pune Municipal Corporation (PMC) had announced eight projects under AHP in August 2017 and has also invited applications from EWS families. Of these, five projects progressed and in October 2020 PMC drew lotteries to determine the beneficiaries who would get the opportunity to buy low cost 2,918 apartments from the pool of 40,000 applications that it had received.

The five housing projects are located in Hadapsar, Survey No. 106A (340 homes), Kharadi (786), Vadgaon Khurd (1108), Hadapsar, Survey No.89 (584), and Hadapsar, Survey No.106A12 (100). Each dwelling unit is a 1BHK (bedroom, hall & kitchen) apartment with a carpet area of about 350 square feet.

As per officials at PMC’s PMAY(U) Cell, not all allottees who didn’t lay their claim over the homes found the offer unattractive or were not able to pay up the booking amount. “We had accepted the applications in 2017 and the lottery was drawn full three years later in October 2020. Many may have changed the contact numbers and did not get our messages. Owing to the Covid-19 pandemic and the lockdown, many may have also moved out of the city and did not see lists of the winners published in the newspapers. We were receiving calls and personal visits of such people after November 23 but we could not consider their requests as it would have been unjust to those in the waiting list,” said Dinesh Rokade, Joint-Director for PMAY(U) implementation in PMC areas.

Financial incapability, however, remains a recurring theme among the allottees, including those who have laid a claim and paid up the first installment. “It’s beyond my comprehension why they had to make the allottment in the thick of the lockdown,” said Satvashila Bhosale, a domestic worker who stays in Yerwada area. “My husband who worked in a Titan shop lost his job during the lockdown and now banks are refusing to give us a loan. We are in a big trouble since we don’t want to lose the money we have already paid,” she said.

To help the allottees secure a bank loan, the PMC has set up home-loan stalls in its premises where housing finance companies and loan consultancies are guiding the allottees with loan procedure and accepting applications if they find them eligible. “Problem with most of the allottees is that they already have borrowed from banks and have unpaid loans on their accounts. Most have very poor credit history. In fact, some of them availed personal loans to pay the first installment for PMAY home which reflects poorly on their financial health. This makes them very weak loan candidates,” said a DSA (direct selling agent) present at the spot.

Rokade said that the PMAY(U) cell at PMC is learning from its mistakes earlier and the future AHP projects (five of them are being planned) will take into accounts the issues faced by the allottees and make the allottment process quicker and more accessible to the EWS families.

Show construction progress to avail PMAY funds: Maharashtra civic bodies

Earlier, civic bodies in the state – acting upon guidelines of the Maharashtra Housing and Area Development Authority (MHADA) – were releasing advance subsidy to beneficiary families constructing houses under the BLC (Beneficiary Led Construction) component of the PMAY(U) to ensure fast progress of the projects.

Beneficiaries are now required to show the progress of the house before requesting release of funds at each stage of the construction. (Photo Credit: Atikh Rashid)

Learning from earlier adverse experience, civic bodies in Maharashtra have now changed the pattern of releasing the subsidy under the Pradhan Mantri Awas Yojana (Urban) to the beneficiaries to ensure the money is not diverted from the intended purpose of the house construction.

Beneficiaries are now required to show the progress of the house before requesting release of funds at each stage of the construction.

Earlier, civic bodies in the state – acting upon guidelines of the Maharashtra Housing and Area Development Authority (MHADA) – were releasing advance subsidy to beneficiary families constructing houses under the BLC (Beneficiary Led Construction) component of the PMAY(U) to ensure fast progress of the projects.

However, this policy led to a considerable number of beneficiaries (about 20-25 per cent, as per MHADA officials) diverting the funds for other purposes, thus stalling the progress of construction. In several towns and cities in the state, PMAY(U) projects have not reached completion despite being under progress for one, two or more years.

The Covid-19 pandemic and the lockdown imposed between March and August resulted in a drastic reduction in earnings of economically weaker families – the target demographic for the BLC component – and may have further led to diversion of the funds received from the state and central governments to ensure livelihood.

“Considering past experience, we have decided to release the subsidy amount only after progress is shown at each stage,” Karbhari Divekar, Chief Officer, Pathri Municipal Council in Parbhani district. “Previously, we had deposited an upfront amount of Rs 40,000 in the accounts of the 1,050 beneficiaries when we gave them the building plan sanctions. But about 300 didn’t commence work,” he added.

In Pathri, new 1550 PMAY(U) beneficiaries whose names appear in the latest BLC project plan, have been asked to commence the work on the homes and that they will receive the first installment of Rs 40,000 after the foundation work is done, additional Rs 60,000 when the work progresses until lintel-level and rest Rs 1.50 lakh after the work finishes.

The beneficiaries are not too enthused about this strategy. “I will have to borrow money from private sources to start the work as I don’t have money to put in. As per the new strategy, only those who are well-off or have savings will be able to take advantage of the scheme,” said Laxmikant Ambure, a beneficiary.

Central subsidy released in some towns

Following The Indian Express report highlighting the status of the work on 1,150 houses sanctioned for PMAY(U) beneficiaries in several towns of the Marathwada region, MHADA – the state coordinating agency for PMAY(U) – has released the central subsidy for some of the towns.

As per officials with Parbhani, Hingoli and Pathri municipal bodies, some central funds have been received in the recent weeks, enabling them to release the 3rd and 4th installment of the funds to the beneficiaries.

Officials with Hingoli Municipal Council said they have received Rs 3.33 crore of the central subsidy while those in Pathri said they have received Rs 5 crore. “We had to wait for long. People really suffered as the work got stalled due to unavailability of funds. We hope that in future, the central funds will be released in a timely manner,” said Divekar.

As reported earlier, the release of central funds for the BLC component has been severely delayed owing to failure of a section of the Urban Local Bodies (ULB) to submit the utilisation certificates (UC) for amounts earlier released.

Although MHADA’s Dilip Muglikar, who is in-charge of PMAY(U) implementation in the state, did not comment, officials in the Ministry of Housing and Urban Affairs (MoHUA) said they are still awaiting the submission of UC’s from Maharashtra.

“Of the total Rs 803 crore released, we have received the UC’s only for Rs 211 crore. The amount for which the UCs are due is close to Rs 550 crore. We won’t be able to release additional funds until we get UC’s for at least 80% of this amount,” said the a Ministry official who did not wish to be named.

(This news report appeared in The Indian Express on December 5 2020. It can be read here)

PMAY(U) subsidy delayed, thousands of beneficiaries forced to live in shanties or half-finished houses

Of the 2.19 lakh homes sanctioned in Maharashtra under Beneficiary Led Construction (BLC) component of Prime Minister Narendra Modi’s flagship housing scheme, only 22,000 have been completed. Most beneficiaries – including those who have finished work – await release of Rs 1.5 lakh central subsidy

Delay in the release of Central Government share of PMAY(U) subsidy has halted construction of houses in many towns of Maharashtra for several months now. Roofless under-construction houses have become a common sight in small towns of the state. (Photo: Atikh Rashid)


Beneficiary led construction (BLC), one of the four components of the Pradhan Mantri Awas Yojana (PMAY)– Prime Minister Narendra Modi’s flagship programme to construct affordable houses in urban areas by 2022– has emerged as the most popular of the four components of the scheme.

The high demand for BLC, especially in small cities and towns, is because of the comparative flexibility it offers to beneficiaries to construct stand-alone houses on their own plot. The other three components of the scheme are the Credit Linked Subsidy Scheme (CLSS), Affordable Housing in Partnership (AHP) and In-Situ Slum Rehabilitation (ISSR).

Under BLC, the central government provides an assistance of Rs 1.5 lakh per beneficiary for construction of a new house, with a carpet area not exceeding 30 square metres, or enhancement of 9 square metres to an existing house. Several states have also offered an additional financial assistance to the scheme, with the Maharashtra government offering an additional Rs 1 lakh per dwelling unit (DU).

Homes sanctioned under BLC are more than those sanctioned under three other components combined.

The popularity of the scheme in the state can be gauged by the fact that 2.19 lakh homes have been sanctioned under the scheme since 2016 under 350 urban local bodies (ULBs) such as municipal corporations, municipal councils, and nagar panchayats, till date.

However, the initial enthusiasm of the beneficiaries of the scheme and ULBs has now replaced with uncertainty and dismay. This has been caused by delay in the release of the promised central subsidy of Rs 1.5 lakh – in whole or part – to the beneficiaries who are in the middle of construction. As a result of the 2.19 lakh houses sanctioned in the state between 2016-2019, only 22,000 have been completed.

The state and union government officials involved in PMAY(U) insist that there is no shortage of funds but their release has been plagued by the failure by the ULBs to submit utilisation certificates (UC) for funds released earlier.

The Covid-19 pandemic and the prolonged lockdown has only made the matters worse as a large number of beneficiaries are not able to contribute their own share towards the construction. The result: Over 1 lakh beneficiaries in the state have not reported any progress despite receiving the first few instalments of financial assistance.

At the national level, out of the total 67.44 lakh homes sanctioned under BLC, 36.67 lakh have been grounded and 17.08 have been completed. As many as 13.44 lakh have not shown any progress.

In Maharashtra, of about 80,000 homes that are incomplete most have been constructed till the lintel level and are standing roofless. Officials say that the future installments of the assistance will only be released for them after the roof has been cast. Many beneficiaries, however, expressed inability to do so. The Indian Express found that many beneficiaries have now given up hope and started putting old tin sheets over the newly constructed walls where an RCC roof was intended to be cast.

Many beneficiaries have given up hope and have moved into half-constructed houses by putting old GC sheets over the walls instead of waiting for the funds to cast the RCC roof promised under PMAY(U). (Photo Credit: Atikh Rashid)

Officials with ULBs say that despite repeated follow-ups with PMAY(U) authorities, no solution is being found to the issue of incomplete houses although desperate beneficiaries continue to badger them with queries about the release of funds.

Desperate wait for the new house

It’s been over eight months since Mukhtar Begam’s family in Pathri – a town of about 40,000 population in Parbhani district about 550 kms from Mumbai– moved into a metal sheet shanty erected on an empty plot under high-tension electricity wires about 50 metres away from their old home. The family dismantled this kuccha house hoping to build a new two-room home, with a kitchen and a toilet, as promised by the scheme after their name appeared in the list of beneficiaries released by the Pathri Municipal Council. Since then, Mukhtar Begam has come to repent her decision.

The construction progressed until the lintel-level when the money ran out. The family has spent over Rs 2 lakh on the house, including the Rs 1 lakh they received in financial assistance, the state government share promised under the scheme. Her husband is a woodcutter who earns Rs 300 on the days he manages to find work. His income has dried up since March, when the nationwide lockdown came into effect.

“He has to travel to cut trees and during the lockdown, all the travelling came to a halt. We were struggling to survive,” said Mukhtar Begum, who is mother to three daughters and a son.

Monsoon has been especially challenging for the family. While they are used to a leaking roof, life in a makeshift shanty during heavy rain has posed some newer, and frightening, challenges. The overhead high-tension wires often snap in strong winds and fall on the tin roof of her house, turning the entire tenement into an electrically-charged unit.

LIkes hundreds of others the work on Mukhtar Begum’s home has halted in absence of money. (In the inset, she points to the overhead electricity wires that she sees as a mortal danger for her family). (Photo Credit: Haseeb Shaikh)

“It happened thrice till now. Sometimes we rush out and other times, when it’s raining, we have to stay inside. I hold my breath and start chanting god’s name – clutching my youngest child to the chest,” said Mukhtar Begum, pointing to the wire over her roof. “I’m repenting for having demolished my house and came into the lure of having a nice RCC home for my kids. Often, I cry over this. My husband has even threatened to abandon me because of the constant cribbing over the house,” she said.

About 100 metres away, in Vilas Gople Nagar, Babarao Tambe is curses the day he picked PMAY (U) over Ramai Awas Yojana, Maharashtra Government’s housing scheme for poor families belonging to Schedule Castes and Scheduled Tribes which also provides the 2.5 lakh subsidy for construction of a house.

“My cousin got a house sanctioned under Ramai at the same time I got mine under PMAY. I have so far received Rs 1 lakh and have spent Rs 3.60 lakh, of this, Rs 2 lakh of I have borrowed. My cousin has received Rs 2.5 lakh in subsidy and his house is ready and he has a loan of about Rs 1 lakh to repay. I would have been better off if I had applied through that scheme,” said Tambe. He demolished his mud-house in February 2019 to build a new and shifted to an empty tenement in the neighborhood. The stay has turned out to be for over a year now. The new house looks strong and imposing but needs further work such as plastering of the inner walls, installation of doors, windows and fittings in the bathroom and the toilet. “I don’t have any money left and am waiting for the next instalments of the subsidy which are now due,” he said.

Babarao Tambe stands next to his new house being built under PMAY (U). Behind him is the tenement where his family has been living for about a year and must continue until the work on the new home is over. (Photo Credit: Atikh Rashid)

In the town of Pathri, 1153 DUs has been sanctioned under the scheme since 2018 and work started on 1050 tenements between January 2019 and January 2020. As of October 5, only 200 homes have been completed while 621 remain in various staged of incompletion. All these houses have received Rs 1 lakh in two instalments from the state government’s share– one of Rs 40,000 and then Rs 60,000 – and are awaiting further funds to complete the work. About 250 beneficiaries have reported no progress.

In Jintur, about 60  kms from Pathri, only 175 beneficiaries have completed the construction out of 1250 sanctioned homes and even they are awaiting one to three instalments (Rs 30,000 to 1.5 lakh) of central assistance. As many as 500 do not yet have a roof and in rest of the cases, the work did not start at all.

In the Hingoli town, headquarter of the neighbouring district, construction of 1098 houses was sanctioned and work orders were issued in 951 cases. Of these 448 DUs have been completed while 503 DUs are stuck at the lintel level. Most of the beneficiaries who have completed the construction have not received central assistance.

“We received Rs 11.33 crore from the state government and should have received Rs 16 crore from the central government but are in receipt of only Rs 35.40 lakh. UCs of all the funds have been submitted – not once but four times – but further release have not happened. In fact, for some of the beneficiaries we used unspent funds from the state government assistance,” said HIngoli Municipal Council Chief Officer Ajay Kurwade.

Desperation is highest in the section of beneficiaries who had moved into rental accommodations after dismantling their existing homes to construct new, better ones under PMAY(U), say local politicians.

“In Pathri, many beneficiaries are staying in rented houses and have spent a considerable amount in rent. Due to the long delay in the release of the 3rd and 4th instalments of the subsidy, many have now started to return to half-constructed houses by covering them with tin or plastic sheets because they can’t afford pay rent anymore,” said NCP leader from Pathri and MLC Abdullah Khan Durrani. The high cost of sand (at Rs 25,000 per brass) has also made it difficult for poor families to finish the construction on their own, he added.

COVID-19, lockdown hampered EWS families’ ability to invest ‘beneficirary share’

As per officials, an estimated cost of the construction work that is desired to be done under BLC (with the desired strength, size, design and finish) requires an investment ranging from Rs 4.5 to 6.5 lakh. Thus a beneficiary needs to put in about Rs 2 to 4 lakh from his own pocket to complete the house in addition to the Rs 2.5 lakh received in subsidy.

It appears that the local bodies either failed to apprise the beneficiaries that they will have to put in such an amount or the contingencies of the ongoing pandemic – prolonged lockdown, loss of wages – has deprived them of the resources that they could otherwise have put in.

“Many seem to think that PMAY is like previously implemented schemes where the government was providing all the money. In PMAY (U) you have to pitch in your own share. If they are not able to do that, the work lags,” Dilip Muglikar, Executive Engineer, Maharashtra Housing and Area Development Authority (MHADA) which is implementing PMAY(U) in the state, told The Indian Express.

Naseer Shaikh is one such beneficiary who is palpably desperate to finish the work but is unable to invest more than Rs 50,000 for the construction. “I have spent Rs 50,000 by borrowing from friends and family, apart from Rs 1 lakh subsidy received, and can put in no more. I work in a bakery and due to the lockdown, my earnings have suffered in the last six months. I don’t have a penny to put in the house and the officials are telling me that I would not get the next instalment if I don’t finish casting the roof for which I will need about Rs 80,000 to 1 lakh,” he said.

The rainy season has been “very tough” on Naseer Shaikh this year who demolished his existing kachcha house in the hope of building a better one under PMAY (U). Without money to finish the work on his own, he is left with no option but to wait for the next instalment of subsidy. (Photo Credit: Haseeeb Shaikh)

Last week, municipal officials in Pathri issued notices to 250 beneficiaries whose work had not progressed satisfactorily. “Most pointed to the lockdown having affected their earnings,” said a staffer requesting not to be named. “They are also unwilling to put in money because they see that those who did are also stuck because of non-release of subsidy in the latter stages of construction,” he added.

A year ago when the scheme picked up and beneficiaries were getting subsidy amounts on time, suppliers of construction material were willingly supplying cement, steel and bricks on credit. “They knew that the money was coming –in a week or two. But now since no funds have been released for months they have grown cautious and turning away those seeking to buy on credit,” said an official from Pathri Municipal Council.

PMAY (U) officials blame non-submission of Utilisation Certificates by ULBs for delay

As per Muglikar, the factor that has caused withholding of the central assistance from the beneficiaries who have shown significant progress is the failure a section of ULBs to submit utilisation certificates (UC) of the central funds received by them in the past.

“Funds from the sanctioned central subsidy are held up because of the issue of submission of the UCs. As per the rule, the state will have to submit UCs for at least 70 per cent of the released funds to seek further release. Of the Rs 600 crore odd central assistance released to ULBs in Maharashtra since 2016, we have so far submitted to the MoHUA UCs for Rs 214 crores. UCs for another Rs 200 crore have been received from ULBs and will soon be sent to the union ministry. Once the we have submitted UCs for about 70 per cent (about Rs 450 crore) received funds our case to seek the release of next rounds of funds will be strengthened,” said Muglikar.

Officials suspect that the ULBs may have failed to submit the UCs because a section of the beneficiaries may have spent the money elsewhere. “The Covid-19 pandemic and the prolonged lockdown may have played a role,” said Muglikar.

When contacted for a comment, the Ministry of Housing and Urban Affairs (MoHUA) did not provide an official response. On condition of anonymity, a highly placed officer said that the Ministry was aware of the issues being faced in the implementation of the PMAY(U) in Maharashtra and was taking urgent steps to resolve them. “We are in regular touch with the MHADA officials and have now written to the state government. The issue is not caused by a lack of funds. We are seeking submission UCs and will soon resolve the problem,” said the MoHUA official.

ULB officials and local politicians are not ready to buy ‘non-submission of UC’ argument furthered by the Ministry. “If some ULBs have not submitted the UCs then they should be affected. Why should the funds of hundreds of other ULBs be stopped and thousands of poor beneficiaries be left in the lurch? People are suffering terribly due to the delay and have lost confidence in the scheme. It will be difficult for us to approach newer beneficiaries who had earlier shortlisted to be included in future DPRs,” said a municipal council chief officer requesting anonymity.

(This article appeared in The Indian Express on October 9 2020. It can be accessed here)