Air India Disinvestment housing scheme: 60% completion in 11 of 35 states

It would take the government another five years to construct all houses sanctioned under Pradhan Mantri Awas Yojana (urban).

Finance Minister Nirmala Sitharaman’s budget this year allocated Rs 48,000 crore for Pradhan Mantri Awas Yojana (PMAY), the government’s housing scheme.

The outlay was to flow to both urban and rural India. Days after the Budget announcement, the government extended the deadline for constructing houses in villages to two more years, as it was woefully short of the target.

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A Business Standard analysis shows that the government may have to do the same for the urban scheme, as only 48.7 per cent of houses had been completed until May 17. The government had set a target to finish the construction of sanctioned houses by March 31, 2022.

As against a target of 12.1 million houses, it constructed and deliver 5.9 million houses since the scheme was announced in June 2015.

Data from the PMAY portal shows that house completion has averaged less than 2 million per year. The government's highest was in 2018-19, when it constructed 1.8 million houses. In 2019-20, 840,645 houses were completed, whereas 14.6 million and 12.1 million houses were constructed in the subsequent two years.

Back of the envelope calculations show that the government would need another five years to complete its target at this pace. This does not account for new sanctions made by the government. The number of sanctioned houses has also undergone revision in the last few years. While the government had sanctioned 11 million houses in the initial scheme, now it has to service and deliver a little over 12 million houses.

Analysis shows that besides most northeastern states where completion rates were below 30 per cent, Andhra Pradesh, Haryana, Bihar, and Karnataka were also lower than the national average. Eighteen of 35 states/UTs had a completion rate lower than the national average. Andhra Pradesh had only been able to deliver 24 per cent of sanctioned houses. Haryana had completed 31.4 per cent, whereas Bihar had achieved a completion rate of 34.2 per cent.

In Delhi and Chandigarh, more houses than were sanctioned were delivered under the scheme. Goa had a 92 per cent completion rate. Eleven states and UTs, including Uttar Pradesh had over 60 per cent completion rate.

As per the government’s dashboard, Rs 1.18 trillion of central assistance has been released for construction. It had committed Rs 2 trillion towards construction. As projects get delayed, construction costs are also expected to increase.