The recent shift in the nature of Centrally funded housing schemes, from the old model of the government providing most of the funds with a small contribution from the beneficiary to the new one of the beneficiary availing a bank loan and repaying it, has thrown up concerns on how much it will benefit the poor. The Pradhan Mantri Awaas Yojana (PMAY) was launched last year, replacing the Rajiv Awaas Yojana (RAY) and the Basic Services for the Urban Poor (BSUP) housing schemes. The old schemes worked on the principle of contributions from the Union government, State government, the local body and a contribution from the beneficiary, mostly between Rs.30,000 to Rs.50,000.
The new PMAY has two major schemes – one for constructing houses and another for constructing a new house or carrying out maintenance work on existing uninhabitable house. For the maintenance work, the earlier model of contribution from governments and local body is followed. In case of constructing a new house, instead of the earlier model, the beneficiary is provided Rs.6 lakh of bank loan at 6.5 per cent interest rate to construct houses. The main concern raised is that repayment would be a tall order for the beneficiaries.
“This scheme is meant for the homeless. This would include those living in puramboke land and even those sleeping under the bridge. Even with the previous schemes, people were struggling to pay their small contributions. For them, repaying a loan every month will be tough,” says Palayam Rajan, councillor and former Welfare Standing Committee Chairperson of the city Corporation.
Only limited loans
Some of the councillors feel that only a handful of the hundreds of applicants from each ward will end up even getting a loan. “A co-ordination committee of the banks has let it known that only 30,000 loans can be provided across the State over the next two years. This would mean that from each ward only a handful will get such loans. This shift to the loan scheme has replaced a scheme which was working perfectly fine,” says Sivaji, councillor of the Punnakkamughal ward.
Official version
However, an official handling the housing schemes in the Corporation begs to differ. “Many of the applicants are currently staying at houses with a monthly rent of Rs.4,000-6,000. The monthly EMI for the loan would be less than this. Earlier, banks were reluctant to lend for such schemes. But, now the government has taken them into confidence. A risk alleviating fund has been set aside by the government in case of issues with repayment,” says the official.
Limited access
Earlier, they used to pay a maximum of Rs.50,000
The rest was provided by Union and State governments and local bodies
Beneficiaries include those living in puramboke land
Only a handful of applicants are likely to get loan
