The quality of housing is the most visible aspect of poverty. In India’s cities and villages, the poorest almost always live in makeshift or dilapidated homes, which can be bad for their health and hurt their productivity. Governments have long tried to address this through different housing policies, the latest being the Bharatiya Janata Party-led National Democratic Alliance’s (NDA’s) Pradhan Mantri Awaas Yojana (PMAY). Comprising both an urban and a rural component, the policy seeks to provide quality “Housing for All" by 2022.

While Indian housing has improved steadily over the last two decades, including a sharp increase between 2011 and 2015-16, there remains a significant shortfall in quality homes.

In 2015-16, only a little more than half (56%) of all Indian homes were fully pucca (had solid walls, roofs and floors), according to the latest round of the National Family Health Survey (NFHS), a large-scale, nationwide survey. The majority of India’s poor quality homes are found in rural areas where more than half of all homes are kuccha or semi-pucca, that is, lacking either a solid wall, roof or floor (See chart 1).

One reason for rural housing being in this state could be traced to the inefficiencies of previous government schemes such as the Indira Awaas Yojana (IAY), launched in 1985 by then-prime minister Rajiv Gandhi and meant to construct houses for rural families below the poverty line.

A 2014 Comptroller and Auditor General of India performance audit suggested that IAY had limited impact because of gaps in beneficiary selection, low-quality home construction and weak monitoring mechanisms.

The NDA’s response was to revamp IAY into PMAY-Gramin (PMAY-G). In principle, PMAY-G and IAY are broadly similar: both schemes focus on providing financial assistance to the poor for home construction. However, PMAY-G differs significantly in approach.

For a start, beneficiary identification in PMAY-G is radically different. Rather than using poverty estimates from states like IAY did, PMAY-G uses data from the Socio Economic and Caste Census (SECC) to identify eligible beneficiaries. SECC provides details of homes, including the state of walls and roofs, which in theory should allow PMAY-G to target the beneficiaries in need of better homes. Around 40 million beneficiaries have been identified this way, of whom around 26 million have been verified as eligible beneficiaries by gram sabhas or village councils.

The other major difference between PMAY-G and IAY lies in the benefits: beneficiaries now receive more financial assistance for home construction. For instance, beneficiaries living in normal terrain received 1.2 lakh to build a better home (up from 70,000 they would have been eligible for under IAY).

However, even with this increase, the spending on rural housing under the NDA government continues to be largely in line with that of the United Progressive Alliance (UPA)-II.

PMAY-G has also tried to ramp up construction. Targets set for the construction of new homes under the scheme have been more aggressive. However, these targets, like those under IAY, have never been met: houses constructed in 2016-17 and 2017-18 were short of the target by more than 20%. In 2016-17, according to data from the PMAY-G dashboard, around 3.4 million houses were constructed and while these include houses where construction was started under IAY, it is the highest figure over the last decade. Yet this could well reflect a spurt induced by PMAY-G’s launch in 2016. Since then both the numbers of targeted homes and constructed homes have declined (See chart 3).

Taken together, PMAY-G has led to 10 million newly constructed homes as of December 2018, according to data from the Lok Sabha. As per the programme’s guidelines, all these homes should be fully pucca with solid walls, roofs and floors. However, these new constructions have only modestly impacted the overall need for pucca homes in rural India. Using the latest NFHS data and census population projections between 2001 and 2011, Mint estimated that rural India lacked 107 million fully pucca homes in 2016. Since then, PMAY-G’s new homes have only cut this deficit by 9.4%. However, there is significant variation across states. Some of the states with the largest pucca home deficits, such as Odisha, West Bengal, Chhattisgarh and Madhya Pradesh, have seen larger increases in pucca homes. These are also the states with more PMAY-G beneficiaries and, consequently, higher construction targets.

However, some other states, such as Bihar and Uttar Pradesh, with greater PMAY-G beneficiaries and targets, have had relatively smaller increases in pucca homes. PMAY-G also seems to perform better in the plains. In hilly states such as Uttarakhand and Arunachal Pradesh with more difficult terrain, PMAY-G has had a more limited dent on the pucca home deficit. For Housing for All to realize its vision in rural India by 2022, there will need to be a dramatic increase in the pace of house construction (See chart 4).


Housing challenges extend to urban areas as well. In cities, though, more than quality of construction, space is the major constraint. According to the housing and urban affairs ministry’s Report of the Technical Group on Urban Housing Shortage (2012-17), at least 15 million homes are too congested (defined as married couples living in homes without a separate room for themselves). Here, too, like PMAY-G, the NDA response has been to subsume and consolidate urban home-related schemes and focus on subsidies for individual house construction through PMAY-Urban (PMAY-U).

However, unlike PMAY-G, the volume of home construction is far lower.

Since PMAY-U’s launch, data from Parliament reveals that only 1.26 million homes have been constructed—well short of the housing ministry’s 2012 estimated backlog of 19 million.

*This is the seventh of a 12-part report card series on NDA-II.

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