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The Union Budget 2024-25 allocated a record Rs.10lakh crore to Pradhan Mantri Awas Yojana (PMAY)-Urban 2.0, with the aim of providing housing to one crore urban poor and middle-class families over the next five years. The scheme builds on the original PMAY-U program, which sought 'Housing for All' in cities through verticals such as Beneficiary-Led Construction (BLC), Affordable Housing in Partnership (AHP), Affordable Rental Housing (ARH), and the Interest Subsidy Scheme (ISS).
Current Status: Big Ambitions, Modest Delivery
Since its launch in 2015, PMAY-Urban has sanctioned around 1.18 crore homes, but only about 92-93 lakh homes have been completed as of mid-2024. Earlier data shows that by December 2022, just 61 lakh homes were delivered, reflecting a significant lag between sanctioning and completion.
This gap stems from multiple factors: slow beneficiary onboarding, land availability challenges, delayed state contributions, and inadequate infrastructure like water, sewer, and power connections. In several cities, completed flats remain unoccupied for years because basic utilities are not ready. For instance, Ghaziabad’s PMAY blocks have been 'ready' for seven years but await essential services for handover.
Why Execution Lags
Beneficiary-Led Model Limitations:
Over 60% of homes are under BLC, which depends on beneficiaries owning land and mobilizing co-funding. Many urban poor are landless, limiting uptake and completion.
State-Level Bottlenecks:
Delays in releasing the state share of funds, as seen in Rajasthan and some northeastern states, slow down projects and increase the burden on beneficiaries.
Infrastructure Coordination:
Local bodies often fail to synchronize utility connections with construction schedules, leaving many flats locked and undelivered.
Cost Escalation & Beneficiary Dropouts:
Rising cement, steel, and labor costs exceed the original subsidy framework, leading to incomplete houses and defaults, as observed in Prayagraj and Vizianagaram.
Awareness and Demand Gaps:
Surveys and eligibility verification take time, while many urban poor remain unaware or struggle with documentation and digital processes.
PMAY-U 2.0: What the Budget Promises
The Rs.10 lakh crore allocation will be spread across five years, with Rs.2.2 lakh crore as central assistance to states and partner institutions. The scheme aims to energize Affordable Rental Housing for migrant workers, PPP-based AHP projects, and Interest Subsidy Schemes for EWS/LIG home loans.
To support financing, the Credit Risk Guarantee Fund has been tripled to Rs.3,000 crore, reducing lending risk for banks and improving access to low-cost home loans.
Wider Economic and Social Impact
If implemented effectively, PMAY-U 2.0 could generate massive demand for cement, steel, tiles, bricks, sanitaryware, and construction services, benefiting MSMEs, logistics, and employment. Housing delivery also drives social stability, slum reduction, and improved urban health.
The Road Ahead
The success of PMAY-Urban 2.0 will depend on bridging the gap between announcements and on?ground execution. Stronger state participation, timely fund release, better infrastructure coordination, and strict monitoring via geo-tagging will be crucial.
While the Rs.10?lakh crore boost sets an ambitious stage, the lessons from the first PMAY-U phase are clear: sanctioning homes is not enough, timely delivery and occupancy are what will truly transform urban affordable housing.
