Skip to main content

India's poor "left" in the lurch in Central government's new urban thrust, as experts allege middle class policy bias

By Our Representative
The recent Government of India decision to make its credit-linked subsidy scheme for urban housing more attractive for the middle income groups by offering them a higher carpet area than what hitherto was the case has come under sharp criticism of the country's top urban experts, who say, it would dilute the "core pro-poor character" of Prime Minister Narendra Modi's much publicised urban housing thrust.
Called Pradhan Mantri Awas Yojana – Urban (PMAY-U), launched in June 2015 and revised periodically, it was designed to provide interest subsidy for houses offered to different income groups. The scheme was first launched for what are called Economically Weaker Sections (EWS) and Low Income Groups (LIG), but was extended to Middle Income Groups (MIG) on December 31, 2016, post-demonetization.
Finding that things were srill not becoming viable for the private players, who were contracted under public-private partnership mode, MIG housing was further categorized into two -- MIG-I and MIG-II -- for households with annual income between Rs. 6-12 lakh and Rs. 12-18 lakh, respectively. The upper limit of the subsidized loan amount under MIG-I was fixed at Rs 9 lakh with 4% interest subvention, the corresponding figures for MIG-II being Rs. 12 lakh and 3%.
As for the EWS households, with an annual income up to Rs 3 lakh, and LIG households with an annual income between Rs 3 and 6 lakh), they would be getting interest subsidy of 6.5% for loan amounts up to Rs 6 lakh for the maximum period of 20 years, and loans above the stipulated amount would not be subsidized.
To make the scheme further "attractive", again for MIG, last month, in a surprise move, the Cabinet announced increase in the carpet area for the MIG-I category from 90 square metres (sq m) to up to 120 sq m and for the MIG-II category from 110 sq m to 150 sq m.
Attached with the Institute for Human Development, New Delhi, Amitabh Kundu and Arjun Kumar have said, in an effort to woo MIG, Modi government appears to have forgotten what the Technical Group on Urban Housing Shortage, 2012–17 (TG-12) had noted -- that the households from EWS and LIG account for 56.18 per cent and 39.44 per cent, respectively, of the total estimated urban housing shortage of 18.8 million.
"Households with monthly income up to Rs. 5,000 are placed in EWS while those with income between Rs 5,000 and Rs 10,000 constitute the LIG", the scholars said, adding, "EMI amount more than around Rs 1,500 at current prices is not affordable for poor, if the expenditure pattern as given in the National Sample Survey is taken into consideration."
"A loan amount of Rs 3-6 lakh at the subsidized interest rate sanctioned for a period of 15 years would mean an EMI between Rs. 3,000 - 5,000 per month. Thus, repayment of the loan amount with interest, amounting to more than 50% of their earnings, would be a major issue for the poor", they add. experts said.
With MIG apparently becoming a major target of the Modi government, the experts say, "The chances of the targeted intended beneficiaries being missed (both exclusions of intended beneficiaries and inclusion of non-intended beneficiaries) have thus gone up enormously."
This year, said the experts, the budget esallocation for interest subsidy under PMAY-U, at Rs 5,075 crore in 2016-17, has been increased to Rs 6,043 crore in 2017-18, but of this Rs 1,000 crore is proposed for MIG, adding, recent changes seeking to open of a window for middle income housing have "come up due to the lukewarm response of the poor and LIG and low off-take of loans."
While new measures "will spur the house construction activities, attracting private and foreign investments", may have a "multiplier effect on GDP and labour market and benefit the real estate and builder’s lobby and the middle class", the experts complain, "There is a serious risk that the middle-class will corner much of the subsidies offered, with the poor being pushed out, primarily due to the latter’s lack of repayment capacity and failing to meet the documentation and other formal requirements."

Comments

TRENDING

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

By Our Representative
Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book, "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Contempt of court? UP CM taking 'personal vendetta' against Dr Kafeel Khan: Activists

Counterview Desk
Demanding that the Uttar Pradesh government immediately release well-known paediatrician Dr Kafeel Khan, a group of more than 100 academicians, activists, researchers, doctors and lawyers have said in an open letter that he is being “targeted at the behest of the chief minister”, wondering, “When is an act of challenging the government a threat under the National Security Act (NSA)?”

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam*
RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

ASI has 'no funds' to protect five centuries old Goa church, a World Heritage Site

Counterview Desk
The century-old All-India Catholic Union (AICU), the largest Laity movement in Asia, has blamed the Archaeological Survey of India (ASI) for neglecting the historic Bom Jesu church by keeping its ceilings  open to the vagaries weather, with no steps  taken to protect the five century old monument from damage on account of impending rains on the lame excuse that there are "no funds". In a letter to Prime Minister Narendra Modi, AICU simultaneously asks the Government of India to devise a "comprehensive" national social security safety net, universal health Insurance and medical Infrastructure so that the “calamity” that has befalenl millions of migrant labour and jobless rural and urban poor in “the Covid pandemic-driven lockdown is “never repeated.”

Withdraw sedition charges against three young women activists: 1100 feminists

Counterview Desk
About 1,100 feminists from all over India – organisations and individuals across religion, class, caste, ethnicity, ability, sexuality and genders – have issued a solidarity statement condemning what they have called “the targeted crackdown on Muslims and women activists in Delhi”, who were at the forefront of protests against the Citizenship Amendment Act (CAA), National Register of Citizens (NRC) and National Population Register (NPR).

Will Govt of India, ICMR end 'perverse' practice of extracting profits from ill-health?

By Asmita Verma, Surabhi Agarwal, Bobby Ramakant*
The Epidemics Act, 1897 gives the central and state governments authority to impose any regulations which may be necessary to contain the outbreak of a disease. Some state governments such as Madhya Pradesh, Rajasthan and Chhatisgarh have already used this power to bring private healthcare facilities in their state under government control.

Coping with Covid-19? Options before small, marginal farmers of rainfed regions

By Biswanath Sinha, Kuntal Mukherjee*
The global crisis due to Covid-19 has hit after reaching in western Europe. India’s response to curtail the spread of the disease was quite decisive. It announced a Janata curfew on the March 22, followed by a complete national lockdown from the midnight of March 24.

Tablighis or Namaste Trump? Rupani must 'clarify' on origin of Covid-19 in Gujarat

By Mujahid Nafees* In his video communication on April 24, 2020, chief minister Vijay Rupani informed us that in the month of March the Gujarat government had quarantined 6,000 people returning from abroad in order to prevent the spread of Covid-19 pandemic. He further asserted that the spread of Covid-19 was caused by the tablighis returning from Nizamuddin in Delhi. His statements were widely publicized and given front page coverage by some local dailies.

'Violation' of migrant workers' human rights: Legal notice to IIM-A director, govt babus

By Our Representative
Taking strong exception to the police action against protesting migrant workers off the Indian Institute of Management-Ahmedabad (IIM-A) on May 18, senior Gujarat High Court advocate Anandvardhan Yagnik, in a legal notice to the IIM-A director "on their behalf" has said that the workers had only been seeking to to go back to their home states, Jharkhand and West Bengal, for the last more than 20 days because they were not paid their “earned wages because of the lockdown.”