The government‘s promise to provide ‘Housing for All’ by 2022 faces a severe funding crunch even as implementation is running behind schedule.
The Centre had promised to build 50 million houses by 2022 under the PM Awas Yojana (PMAY) unveiled in 2015, but even a subsequently scaled down target of 32.6 million may be difficult to meet by next year, as there is a ‘large’ ₹1.24 lakh crore funding gap to be bridged in the next eighteen months, ratings agency ICRA said.
“With 1.5 years to go, against the revised targets, 19.55 million houses have been sanctioned and 14.16 million have been completed through PMAY-Rural till April 2021, implying completion of 67% of the revised target and 72% of the sanctioned houses,” said Kapil Banga, assistant vice-president and sector head, ICRA, adding that only 43% of the 11.2 million urban housing units had been built so far.
While the COVID-19 pandemic is expected to impact the scheme’s performance further in FY2021-22, ICRA reckoned that funding posed a bigger challenge.
“In aggregate, of the required ₹4.7 lakh crore, ₹2.97 lakh crore has been incurred in the last five years but a whopping ₹1.71 lakh crore would be required within the next 1.5 years to complete the construction of the balance units by 2022 and meet the near-term, scaled down target,” Mr. Banga said, adding that only ₹47,500 crore had been provided this year.
In the absence of a substantial ramp-up in budgetary allocation, the execution could continue to lag, while the dependence on extra-budgetary resources was likely to remain elevated, ICRA said. “It remains to be seen what additional avenues the government will tap into to raise such financing to expedite the implementation of the scheme,” it concluded in a research note on the scheme.
