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Why the government’s affordable housing scheme appears ambitious

Affordable housing is the flavour of the season, thanks to the Modi government’s ambitious plan of providing housing to all its citizens by 2022. As per the Pradhan Mantri Awas Yojana, there are about 110 million housing units. According to a KPMG report, the housing need is almost equally distributed in urban and rural areas in the range of 50 to 60 million units, and primarily consists of affordable houses. In urban India, the Economically Weaker Sections (EWS) and lower income groups account for nearly 96 per cent of the housing shortage. To overcome this shortage, in June 2015, the Yojana was launched to provide affordable housing through credit-linked subsidies and through public and private stakeholder collaborations. Around 2,800 cities have been selected for inclusion in the mission, but according to government data, of the 864 projects involving 7,28,840 houses that received approvals, work is progressing only on 1,07,687 units (less than 15 per cent of approved projects). But a revealing statistic is the fact that only over 7,200 houses have been built across 681 cities as only these many households have received the benefits of funding under Credit Linked Subsidy Scheme (CLSS). The subsidy is also only for loan amounts of up to  6 lakh and additional loans beyond  6 lakh, if any, would be at a non-subsidised rate. Whether the government indeed manages to achieve the target will depend on how many affordable housing projects are made available by developers.

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