India’s Ministry of Housing and Urban Affairs (MoHUA) has not been able to make requisite spending across projects and fund utilisation. Just about 50 per cent of the original allocation has been spent till mid-February, a Parliamentary committee has pointed out.
In fact, there has been less-than-expected demand for flagship schemes such like PM Awas Yojana – Urban, etc. The Committee noted that inflationary pressures and increased cost of construction need to be factored in scheme outlays to make affordable housing projects attractive for private investors.
The Budget Estimates for the FY25 were ₹82,576 crore; which was later revised to ₹63,669 crore. Out of the revised allocation, the Ministry could spend only ₹42,794 crore (mid-February). Even when spending estimates were reduced, just about 67 per cent of it was spent.
“The Committee have been informed by the Ministry that due to less demand for Central share of funds by various States and UTs under Pradhan Mantri Awas Yojana-Urban (PMAY-U), Swachh Bharat Mission-Urban (SBM-U), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), National Urban Digital Mission (NUDM) and PM e-Bus Sewa schemes, the Budget Estimates 2024-25 have been reduced …” the Standing Committee report said.
“Further, the Ministry also expect that they will be able to utilise the remaining funds of ₹20,875.92 crore under MRTS and Metro Projects, AMRUT, PMAY-U, Smart Cities Mission, PM SVANidhi and GPRA / GPOA schemes by March-end, subject to receipt of complete proposals from States, Union Territories, (and other) implementing agencies,” it added.
Continued lower demand from States indicates “targets set under any Mission / Scheme of the Ministry would be hard to achieve”; and “….generation of interest and demand for central funds and assistance among the stakeholders” has to be taken up. The onus is on the Ministry to “look into the reasons for States/UTs not coming forth and demands being not generated”.
PM Awas Yojana
The flagship ‘Housing for All’ scheme for urban poor also needs a relook, specially the PMAY(U) 2.0.
Post-Covid there has been significant increase in inflationary pressures leading to rise in cost of construction materials. This makes it difficult for the intended beneficiaries – mostly having annual incomes of up to ₹9 lakh – to afford a house in urban areas. If cost of a house under PMAY (U) is borne by the beneficiary whose purchasing and paying capacity is limited, then private players may not be keen to invest.
“Central assistance per dwelling unit under affordable housing in partnership vertical need to be revised proportionally under PMAY(U) 2.0 to reflect the increased construction costs,” the report said.
The Committee also noted that “the progress under PMAY(U) has been slow during FY25…”
In fact, it has recommended that ensure timely occupancy of completed houses, the Ministry should direct the States and UTs to converge various Central and State-sponsored schemes for providing required infrastructure and civic amenities.
Delay in scheme implementation
There have been scheme implementation delays.
For instance, public bus transport scheme was announced in Budget 2021-22, but was approved in September 2023 (as PM-eBus Sewa) and funds actually spent earlier this year (almost two years later).
Similarly, National Urban Digital Mission (NUDM), announced in July 2024, with ₹1,150 crore allocated for FY25 has not yet not received Cabinet approval. Funds allocated remain unutilised.
In case of the Budget 2025-26 schemes – Urban Challenge Fund and Scheme for Industrial Housing with an outlay of ₹10,000 crore and ₹2,500 crore, respectively, the Committee mentioned, “mode and method for selection of cities under the ‘Urban Challenge Fund’ is still under examination” while for the Scheme for Industrial Housing’ is yet to be designed in consultation with stakeholders”, indicating that they have been non-starters so far.
