PMAY-Urban: Budget 2021 Announcements To Benefit Affordable Housing Buyers

All eyes are on the Pradhan Mantri Awas Yojana- Urban (PMAY-U) and its momentum in the urban areas. In Budget 2021-22, the finance minister has announced that the government will extend the Rs 1.5-lakh benefit on interest paid on affordable housing loans under Section 80EEA, by one more year, that is up to March 31, 2022. 

The profits on affordable housing projects are also given a deduction under Section 80IBA of the Income Tax Act and the minister has proposed to extend the date of such deductions for another a year, that is till March 2022. The motive is to help more and more people to benefit from the scheme. Rental housing, which is a segment under the PMAY-U scheme also received a boost, with FM Nirmala Sitharaman providing a tax exemption for notified affordable rental housing projects.

Here are some developments across the country with respect to the PMAY-U. 

Inputs from September 2019 below

The monetary push

Finance Minister Nirmala Sitharaman on September 14, 2019, said that government funds to the tune of Rs 10,000 crores will be made available for affordable and mid-segment projects that are staring at liquidity crisis. However, she also said that the funds will be extended to only those projects that do not have any pending cases under the National Company Law Tribunal (NCLT) or Non-Performing Assets (NPA) cases. The government is looking at faster completion of stalled projects.  

Apart from this, guidelines for External Commercial Borrowings (ECB) will also be relaxed in consultation with the Reserve Bank of India. This move will help PMAY homebuyers and also builders who are looking at funds from overseas investors. 

Nearing the target

Union Minister Hardeep Singh Puri expressed his satisfaction at the pace at which the PMAY scheme was taking place. He said that the target of completing the constructions will be over much before the deadline, that is two years prior to the deadline. In the latest tranche, Uttar Pradesh was given approvals for 54,277 homes ,followed by West Bengal (26,585), Gujarat (26,585), Maharashtra (8,499), Chattisgarh (6,507), Rajasthan (4,947) and Haryana (3,808). 

So far, 88.16 lakh units have been sanctioned while 51.46 lakh have been grounded for construction. Government data also show that of the completed units, 26.49 lakh units have been completed over the last four years while 24 lakh homes have been occupied. For this, central assistance of Rs 52,212 crore has been released. The overall investment is estimated at Rs 5,19,999 crore, official data show.

Angikaar campaign launched

The Union Housing and Urban Affairs Ministry has launched the 'Angikaar campaign'. With this, all Pradhan Mantri Awas Yojana (PMAY-U) beneficiaries will be brought within the fold of central schemes such as the Ujjwala and Ayushman Bharat scheme. The Angikaar campaign will start from October 2, 2019, in a phased manner and will get over by December 10, 2019. The campaign will include door-to-door activities, ward and city-level events" said the official statement.

Union Minister Hardeep Singh Puri said that the scheme is now transitioning from Pradhan Mantri Awas Yojana to a more comprehensive, Parivar Yojana. "A whole composite, including Ujjwala for LPG connection, water conservation, tree plantation, solar and waste management, will be made available to the PMAY-U beneficiaries," he said. This applies to the 26 lakh completed houses.

Additionally, the ministry also launched an e-course that seeks to create awareness and understanding about natural hazards and district-wise level of damage risks that can happen to existing units. This course is in collaboration with the School of Planning & Architecture (SPA), New Delhi, and the Building Materials & Technology Promotion Council (BMTPC).

Social audit of PMAY projects

Andhra Pradesh, Gujarat, Jharkhand, Kerala, Uttarakhand, Mizoram and Manipur are the only states that have submitted a plan for social audit of their PMAY projects. 

A government-funded exercise, social auditing seeks to understand the progress and impact of Centre’s scheme on the beneficiaries and stakeholders through a rigorous process that includes gathering information at every step of the construction work and taking feedback from all stakeholders.

Among the stakeholders whose feedback is taken to conclude the auditing are direct beneficiary groups, elected representatives in Parliament, state assemblies and urban-local bodies, representatives from the local self-governing bodies and other planning agencies responsible for project implementation.

For the above mentioned states, 50 per cent of the funds have been rolled out. Refer to the table below for added information. 

Uttar Pradesh is leading the way

Beating Andhra Pradesh, Uttar Pradesh has grabbed the number one spot when it comes to construction of affordable homes. The authorities have been able to complete 12,44,675 Beneficiary Led Housing (BLH) and 13,41,550 Affordable Housing in Partnership (AHP) houses so far, pushing Andhra Pradesh to the number two spot.

Delhi goes a different way

The national capital has not sent any proposal for construction of affordable homes under the PMAY scheme. However, the Delhi government intends to build homes under the Mukhya Mantri Awas Yojana and a survey by the Delhi Urban Shelter Improvement Board (DUSIB) is reportedly underway to this effect. The central government has said that Delhiites should make known their interest to the DUSIB or the Delhi Development Authority (DDA) and the Delhi government should forward it to the centre for approval.

Estimating the demand

Around 100 lakh homes is the demand out of which 81.03 lakh units have been sanctioned and 26.07 lakh units have been completed. The centre has urged states to identify and propose how many units they will need, within this financial year so that there is no impediments towards finishing the construction by 2022.

Some bad luck in Orissa

Around 2,500 beneficiaries will not be able to receive the second installment of funds in the Jajpur and Vysanagar district because officials have not abided by the guidelines. Release of funds follow only if the lists, geo-tagging of homes, Aadhar verification, utilisation certificates and other mandatory documents are not uploaded online. These beneficiaries can avail of funds in the next round after verification.

Delay in Chandigarh

Four years on, Chandigarh Housing Board is yet to identify land for nearly 10,132 flats under PMAY. Reports suggest that authorities have been seeking land at Rs 3 crore per acre but the collector rates amount to Rs 30 crore per acre. This has caused the delay. The union territory administration has also written to the Ministry of Home Affairs to help identify 104 acres of land for this scheme.

Dedicated app for beneficiaries

In February this year, the PMAY (U) mobile application was launched to help beneficiaries upload pictures and videos of their completed homes. This would in turn be scrutinised at state and central level and selected beneficiaries would be awarded at a special ceremony on the anniversary of PMAY.

Rewards and recognition

In order to reward top performers under different categories, the housing ministry has instituted awards for implementation and innovation. This would encourage a healthy competition between states, union territories, urban local bodies, housing finance corporations and beneficiaries. 

Newer technologies

The authorities aim to complete all the units before 2022 and this would need use of alternate technologies. As per a government circular, about 6,368 model units will be developed with new technology and Request for Proposals (RFPs) have already been published. Agencies that complete the project within schedule will be incentivised with a reward of USD 20,000 each and further opportunities.

Why consider PMAY?

Middle-Income Group-I (MIG-I) and MIG-II homes under the Pradhan Mantri Awas Yojana-Urban (PMAY-U) are now bigger. In the revised plan, those earning an annual income of Rs 6-12 lakh, that is, the MIG-I would be eligible to apply for homes that are 33 per cent bigger in size than before. Earlier these units were 120 square metre (sqm) in size. These homes were 90 sqm when the scheme was launched.

There are modifications made to the MIG-II units as well. The size of units now stand at 200 sqm and just like MIG-1 units, there has been a double revision, from 110 sqm at the very outset to 150 sqm.

Who can buy?

Right from slum-dwellers who would be provided in-situ rehabilitation to the mid-income group, anyone can avail of the benefits of the PMAY.