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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, when India will mark the 75th anniversary of its independence – has emerged as the most popular component 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 their own 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 DUs have been sanctioned under the scheme since 2016 under 350 urban local bodies (ULBs), including municipal corporations, municipal councils and nagar panchayats, till date.

However, the initial enthusiasm of the beneficiaries of the scheme and the urban local bodies (ULB) is 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 have already started the work. As a result of the 2.19 lakh houses sanctioned between 2016-2019, only 22,000 houses have been completed.

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

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

At the national level, of the total 67.44 lakh DUs have been 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 the about 80,000 projects are incomplete most have reached up to lintel level and are standing roofless. The first instalment of Rs 1 lakh from the central assistance will only be released for them after the roof has been cast and many of the beneficiaries 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 in Parbhani district – moved into a metal sheet shanty erected on an empty plot under high-tension electricity wires. After her house was sanctioned under PMAY last year, the family dismantled the kuccha house to build a new two-room home, with a kitchen and a toilet, as promised by the scheme. Since then, she 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 from the state government. 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 in India.

“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 new 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 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 pucca 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 repenting that he picked PMAY (U) over Ramai Awas Yojana, Maharashtra Government’s housing scheme for poor families from SC/ST, which also provides the 2.5 lakh subsidy for a new DU.

“My cousin who got a house sanctioned in 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 on the house. 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 a 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 neighbourhood. 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 entire town of Pathri, 1153 DUs were 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 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 have shown no progress.

In Jintur, about 60  kms from Pathri, only 175 beneficiaries who have completed the construction out of 1250 sanctioned DUs and even they are awaiting one to three instalments (Rs 30,000 to 1.5 lakh) of central assistance. As many as 500 remain without a roof (have progressed till lintel level) 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 their houses have not received central assistance.

“We received 11.33 crore from the state government and should have received Rs 16 crore from the central government but are in receipt of 35.40 lakh. Utilisation certificates 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.

Most desperate is 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 third and fourth 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’

Beneficiary Led Individual House Construction under PMAY (U) aims to provide ‘assistance’ to economically families constructing a new house or enhancing an existing house. An estimated cost of the work is pegged at Rs 4 to 6 lakh. As per various proposals sent by local bodies from Maharashtra, such a house (with the desired strength, size, design and finish) requires an investment ranging from Rs 4.5 to 6.5 lakh and thus the beneficiary needs to put in about Rs 2 to 4 lakh from his own pocket to complete the house.

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,” said Dilip Muglikar, Executive Engineer, Maharashtra Housing and Area Development Authority (MHADA) which is implementing PMAY(U) in the state.

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 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 civic worker from Parbhani.

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 whose work has progressed satisfactorily is the failure a section of ULBs to submit utilisation certificates (UC) of the central funds received by them.

“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, we have so far submitted to the MoHUA only 214 crores. Another UCs for Rs 200 crore have been received from ULBs and will soon be sent to the union ministry. Once the number crosses 70 per cent (about Rs 450 crore) our case to seek the release of next rounds of funds will be strengthened,” said Munglikar.

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 BLC 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 Utilisation Certificates (UC) 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. “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.