FINANCIAL ASSISTANCE AND REGULATORY FRAMEWOR UNDER ARHCs SCHEME

 Ministry of Housing and Urban Affairs (MoHUA) launched Affordable Rental Housing Complexes (ARHCs) as a sub-scheme of Pradhan Mantri Awas Yojana - Urban (PMAY-U) to provide dignified living to urban migrants/poor near their workplace. This scheme is implemented through two models:

1. Model-1: Utilizing existing Government funded vacant houses constructed under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Rajiv Awas Yojana (RAY) to convert into ARHCs through Public Private Partnership (PPP) or by Public Agencies,
2. Model-2: Construction, Operation & Maintenance of ARHCs by Public/Private Entities on their own available vacant land.

Beneficiaries of ARHCs are urban migrants/poor from Economically Weaker Section (EWS)/Low Income Group (LIG). They include labour, urban poor (street vendors, rickshaw pullers, other service providers etc.), industrial workers, and migrants working with market/trade associations, educational/health institutions, hospitality sector, long term tourists/visitors, students or any other persons of such category.

Under Model-1, so far, 5,648 existing Government funded vacant houses have been converted into ARHCs in different States/Union Territories (UTs). Under Model-2, MoHUA has approved proposals for 82,273 new ARHC units in 7 States, of which 35,425 have been completed and remaining are under different stages of initiation/construction. These ARHCs provide dignified living with all civic amenities to the eligible beneficiaries at an affordable rate.  A total of ₹173.89 crore of Technology Innovation Grant (TIG) has been sanctioned, of which ₹83.26 crore has been released under ARHCs.

As per scheme guidelines, the initial affordable rent of ARHCs is fixed by the local authority based on a local survey. Subsequently, rent is enhanced biennially by 8%, subject to a maximum increase of 20% in aggregate, over a period of 5 years, effective from the date of signing the contract. The same mechanism is followed over the entire concession period i.e. 25 years.

As per the operational guidelines of ARHCs, various benefits/incentives were proposed by the Government to encourage proactive participation of Public/Private Entities in the construction and management of ARHCs. The operation guidelines are available at https://arhc.mohua.gov.in/filesUpload/Operational-Guidelines-of-ARHCs.pdf.

So far, the Ministry has not conducted any assessment of ARHCs. However, based on the learning from the experiences of 9 years implementation of PMAY-U, MoHUA has revamped the scheme and launched PMAY-U 2.0 ‘Housing for All’ Mission with effect from 01.09.2024 for implementation in urban areas across the country to construct, purchase and rent a house by 1 crore additional eligible beneficiaries at affordable cost through four verticals i.e., Beneficiary Led Construction (BLC), Affordable Housing in Partnership (AHP), Affordable Rental Housing (ARH) and Interest Subsidy Scheme (ISS). ARH vertical of PMAY-U 2.0 aims to construct rental housing projects for EWS/LIG beneficiaries including migrant workers and other poor who do not want to own a house but require housing for short term basis. The scheme guidelines of PMAY-U 2.0 are available at https://pmay-urban.gov.in/uploads/guidelines/Operational-Guidelines-of-PMAY-U-2.pdf.

PRADHAN MANTRI AWAS YOJANA (URBAN) (PMAY-U)

It is a flagship Mission launched in 2015 with objective “Housing for all”.  The Mission addresses urban housing shortage among the Economically Weaker Section (EWS)/ Lower Income Group (LIG) and Middle Income Group (MIG) categories including the slum dwellers. It adopts a demand driven approach wherein the Housing shortage is decided based on demand assessment by States/Union Territories. This scheme is Implemented by Ministry of Housing and Urban Affairs (MoHUA). This scheme is Covered at  Entire urban area consisting of Statutory Towns, Notified Planning Areas, Development Authorities, Special Area Development Authorities, Industrial Development Authorities or any such authority under State legislation which is entrusted with the functions of urban planning and regulations. The duration of the Mission was initially seven years from FY 2015-16 to FY 2021-22.  The Mission has now been extended up to 31st December, 2024 with all verticals except Credit Linked Subsidy Scheme (CLSS) vertical to complete houses sanctioned up to 31 March 2022.

PMAY (U) is being implemented through the following four verticals:

Critical Observation of Committee of PMAY-U :

 Gap in housing demand assessment: Actual demand for housing under the scheme stands at 1.23 crore and not the estimated 2 crore. 

Lack of basic amenities: As of December 2022, 5.6 lakh houses were not delivered to beneficiaries due to lack of basic services. 

Timeline for grounding and completion: Only 87% sanctioned houses have been grounded till December 2022 and 61 lakh houses have been delivered to beneficiaries.  As of October 2022, less than 50% of houses have been completed in north eastern states (except Tripura) due to geographical and economic reasons. 

High-cost burden on beneficiary: Some states such as Nagaland, Manipur, Meghalaya, and Rajasthan are not providing their share. As a result, the average beneficiary contribution comes about to 60%. 

Emphasis on BLC: Majority of the urban homeless are also landless and purchasing land in an urban area is more challenging than constructing a house on it. Therefore, the over emphasis on BLC vertical dilutes the objective of the scheme. 

Low sanctioning of houses under ISSR vertical: The number of houses sanctioned under it is low. Against a demand of 14.35 lakh houses, only 30% were sanctioned.

Suggestions by the Parliamentary Standing committee on Housing and Urban Affairs:

Focus on Outcome Rather Than Output: The committee suggests that the focus should shift from the number of houses completed to the number of houses actually occupied by beneficiaries. 

Involvement of Beneficiaries: Beneficiaries should be identified prior to construction, involved as stakeholders from the initiation of the project, and their feedback should be acknowledged and acted upon throughout the project to avoid later issues with unoccupied housing. 

Collating Data on De-Notification of Slums-Land: The committee recommends that the Ministry should collate data on the impact of ISSR vertical in terms of de-notification of slums by States and place the same before the Committee. 

Impact Assessment and Necessary Changes: The Ministry needs to conduct an impact assessment and accordingly extend the scheme with necessary changes or formulate another scheme to provide housing for the urban poor. 

Strict Timelines for Construction: The Ministry should ensure strict timelines for starting and completing the construction of houses. 

Varying Central Assistance Based on State Factors: Uniform and fixed central assistance across states may be removed and should vary according to factors such as a state's topography. 

Smoothening of Pre-Construction Processes: Availability of land, seeking statutory clearances, and clearing slums must be smoothened before starting the project.