Finance

Housing under PMAY trailing targets: Icra

“Thus, a significant pick-up in the implementation pace for both, PMAY-U and PMAY-R, will be required to achieve the Housing for All target by 2022,” Banga said.

With only one-and-a-half years to go, the government will have to increase the pace of construction under the Pradhan Mantri Awas Yojna (PMAY) to achieve its target of ‘housing for all’ by 2022, as implementation remains far behind schedule, rating agency Icra said on Monday.

The government had set a scaled down, near-term target of constructing 21.4 million houses under PMAY-Rural (PMAY-R) and 11.2 million under PMAY-Urban (PMAY-U) by 2022.

But against the revised targets, the government sanctioned 19.55 million houses and 14.16 million have been completed under PMAY-R until April, implying completion of 67% of the revised target and 72% of the sanctioned houses. Further, 9% of the houses have not been sanctioned so far, Icra assistant vice president and sector head Kapil Banga said.

While under the PMAY-U, against a revised target of 11.2 million units, almost the entire 11.2 million units have been sanctioned and 4.8 million houses have been completed, leading to completion of only 43% of the near-term target as well as the sanctioned units, he said.

“Thus, a significant pick-up in the implementation pace for both, PMAY-U and PMAY-R, will be required to achieve the Housing for All target by 2022,” Banga said.

Under PMAY, the government had initially set a target of constructing 50 million houses by 2022, of which 30 million units would be for rural areas and 20 million in urban areas.

Icra said performance is also likely to be impacted in FY22 due to Covid-19.

In terms of funding, the allocation towards PMAY-U in the budget has been reduced to Rs 8,000 crore for FY22, against a revised estimate (RE) of Rs 21,000 crore for FY21. It has remained stagnant when compared to the budget estimate (BE) of Rs 8,000 for FY21. Allocation for PMAY-R remained at Rs 21,000 crore for FY22, the same as the RE and the BE for FY21.

Though the extra budgetary resources (EBR) for PMAY-R have been increased from Rs 10,000 crore to Rs 20,000 crore in BE of FY22 as against Rs 10,000 crore in FY2021, the EBR for PMAY-U for FY22 is nil, against Rs 10,000 crore in BE of FY21.

So far, the government has allocated Rs 2.72 lakh crore and incurred Rs 2.02 lakh crore (74%) of the total estimated requirement of Rs 2.88 lakh crore for the revised targets of PMAY-R, leaving pending commitment of Rs 16,000 crore and pending expenditure of Rs 86,000 crore. Further, it has allocated Rs 1.81 lakh crore and has incurred only Rs 0.95 lakh crore (53%) of the total estimated requirement of Rs 1.81 lakh crore towards the revised targets under PMAY-U.

In aggregate, of the required Rs 4.70 lakh crore, Rs 2.97 lakh crore has been incurred in the last five years, but a whopping Rs 1.71 lakh crore (around 37%) of the expenditure would be required to be incurred within the next 1.5 years to complete the construction of the balance units by 2022 to meet the near-term scaled down target, Banga said.

“However, in terms of expenditure trend, the actual consolidated expenditure on PMAY in FY20 was Rs 25,000 crore, the RE for FY21 was Rs 40,500 crore, while the aggregate budgetary allocation for FY22 is only Rs 47,500 crore (including budgeted EBR). Thus a large gap of Rs 1.24 lakh crore is required to be plugged in the next 1.5 years to meet the near-term target,” he said.

Although the Cabinet approved a Rs 60,000-crore dedicated affordable housing fund — the National Urban Housing Fund — in 2018 to support the PMAY programme implementation, a considerable portion of this has already been utilised, raising the need for more allocation, Icra said.

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