Explain the significance “Affordable Housing for All” in the economic development and well-being of India.

The 21st century is called the urban century because for the first time, since dawn of civilization,
more people are residing in urban India than in rural areas. The most important problem in all cities
has been housing due to sudden and large scale influx of migrants from rural areas to urban areas.
Because of the housing shortage in every city almost fifty percent of the population lives in slums.
Whilst the overall population growth has declined over the last decade, urban population growth
continues to be almost twice the annual national population growth rate.
Further, the urban share of the GDP is projected to increase to 75 per cent in 2031 from an
estimated 62-63 percent in 2009-2010 (The High Powered Expert Committee (HPEC), 2011),
Consequently, there is a dire need to improve the quality of life in our cities and to address the
current and anticipated future shortage of housing along with other infrastructure deficit issues
prevalent in our urban centers.
The government estimated the total urban housing shortage at 18.78 million units in the 12th year
plan (The Technical Group on Urban Housing, 2011). Within these 18,78 million units, the housing shortage amongst the Economically Weaker Section (EWS) and the Lower Income Group (LIG) is
extraordinarily high with a 96 per cent share of the total shortage.
Pradhan Mantri Awas Yojana (PMAY), or Affordable Housing for All Mission is divided into two parts:
 PMAY (Gramin), which comes under the ambit of the Ministry of Rural Development and
 PMAY (Urban), which falls under the Ministry of Housing and Urban Affairs
 The target for PMAY is to build approximately 1.2 crore affordable homes in urban centers by
the year 2022 in 4 years.
 PMAY has already quadrupled the number of affordable house sanctioned when compared to
the previous 10 years of JNNURM.
What is an affordable house?
Under PMAY(U), an affordable house goes beyond the construction of four walls using bricks and
cement. A PMAY (U) home, by its very definition, must have a functioning toilet, an electricity
connection, a tapped water connection, and door waste collection, the title of a PMAY (U) home can
be registered under the lady of the house, or co-jointly through a PMAY(U) home, families have
access to all amenities that will allow them to lead a life of dignity, security and prosperity.
PMAY(U) Implementation:
The implementation of PMAY(U) is undertaken through four verticals:
 In-situ slum redevelopment.
 Affordable Housing in Partnership (AHP).
 Credit Linked Subsidy Scheme (CLSS).
 Beneficiary Led Construction (BLC).
A – In – situ slum redevelopment (ISSR)
This uses land as a resource. The scheme aims to provide houses to eligible slum dwellers by
redeveloping the existing slums on public/private land. A grant of INR 1 lac per house is provided by
the central government to the planning and implementing authorities of the states/UTs under this
scheme.
B – Affordable housing in partnership (AHP):
This aims to provide financial assistance to private developers to boost private participation in
affordable housing projects; central assistance is provided at the rate of INR 1.5 lac per EWS house in
private projects where at least 35 percent of the houses are constructed for the EWS category.
C – Credit – linked subsidy scheme (CLSS):
This scheme facilitates easy institutional credit to EWS, LIG and MIG households for the purchase of
homes with interest subsidy credited upfront to the borrower’s account routed through primary
lending institutions (PLIs). This effectively reduces housing loan and equated monthly installments
(EMI).
D – Beneficiary – led construction or enhancement (BLC):
This scheme involves central assistance of INR 1.5 lakh per family for new construction or extension
of existing houses for the EWS/LIG.
Holding period for capital gains tax for immovable property reduced form 3 years to 2 years.
Indira Awaas Yojana will be extended to 600 districts.
Through these verticals, the Mission covers the entire canvas of affordable housing -from the slum
dweller living in the most inhumane conditions; to those belonging to the economically weaker
sections and middle income groups who need affordable banking finance; and to those belonging to
the economically weaker sections and middle income groups who need affordable banking finance;
and to those who own a piece of land, but require additional funding to build their house.
PMAY (U) makes a significant departure from previous top-down models. The Mission trusts the
judgment of the beneficiary to make the most optimal decisions, based her needs.
PMAY(U) is one of several flagship programmes, which is anchored in, and thriving under, the
cooperative federalism model. Under PMAY(U), the state governments themselves accord these
approvals, with only minor suggestions, if any, made at the central level.
Under the scheme, government has announced that an interest rate of only 4 per cent would be
charged on loans above Rs 9 lakh and 3 per cent on amount above Rs 12 Lakhs. However, there is
ambiguity whether those not falling under EWS (Economically Weaker Section) or the LIG (Low
Income Group) segments would be the beneficiaries. More projects will now be eligible for profit-
linked income tax exemptions.
Government as Catalyst:
In the budget for 2017-18, affordable housing was given infrastructure status.
The budget for 2018 -19 institutionalized an Affordable Housing Fund under the National Housing
Banks, to boost financing in the sector.
In addition to these, measures, Section 80-IBA of the Income Tax now provides for 100 percent
deduction of profits for Affordable Housing Projects, to encourage private participation in the
mission.
Way forward:
 The Swachh Bharat or Clean India Mission has today become a Jan Andolan, or a social
movement. Its emphasis on ODF seeks to not only build the requisite number of toilets, but
bring about behavioral change in the country.
 The 500 cities under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which
will have universal water supply coverage and improved sewage networks, will further improve
the quality of life of those living in affordable homes.
 Under the Smart Cities Mission, the 99 cities selected have had extensive citizen engagement to
ensure those living in affordable homes too have an equal say in the development of their city.
Estimates suggest for India to meet its urban demand, the country will have to build 700 to 900
million square meters of residential and commercial space every year till 2030. To put this in
perspective, between now and 2030, India will have to build a new Chicago every year, if it has
to meet its citizen demand for urban living.
 Given this context, the success of PMAY(U) needs to be viewed in conjunction with entire gamut
of planned urbanization underway in the country.
The PMAY(U) epitomizes the seismic shifts taking place in our urban centres and the efforts that are
being made to make Indian cities best in their class.