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

Whistle-blowing IPS officer Sanjiv Bhatt's wife suspects foul play after truck hits her car

By Nachiketa Desai*
Paranoia has seized Shweta Bhatt, wife of suspended Indian Police Service (IPS) officer Sanjiv Bhatt, after the car she was driving was rammed in broad day light. According to Shweta Bhatt, it was beacon light-flashing truck without registration number plate. The incident took place on January 7, just a day ahead of the Gujarat High Court was scheduled to take up the bail application of Sanjiv Bhatt, arrested last year for "involvement" in a 23-year-old case.

Call to support IIM-Bangalore professor, censured for seeking action against Uniliver

Counterview Desk
Sections of the Indian Institute of Managements (IIMs) across India have strongly reacted to the decision to censure Dr Deepak Malghan, a faulty at IIM-Bangalore. Prabhir Vishnu Poruthiyil, who is faculty at IIM-Tiruchirapalli, has sought wider solidarity with Dr Malghan, saying, "The administration has censured Deepak for merely suggesting a meaningful action against Hindustan Unilever for their abysmal environmental record" by “disinviting” it for campus placement.

99% MGNREGA funds "exhausted", Govt of India makes no additional sanctions: Study

Counterview Desk
A letter, addressed to Prime Minister Narendra Modi, and prepared by senior activists led by Aruna Roy on behalf of the Peoples’ Action for Employment Guarantee (PAEG), and signed, among others, by 80 members of Parliament, has regretted that, despite repeated public statements by his government promising employment and job creation that will boost the country’s growth, the country’s only employment guarantee programme, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), “is being systematically undermined.”

Morari Bapu, who has installed new statues of Ram, Laxman, Hanuman without weapons

By Sandeep Pandey*
A saint is one who can give some inner peace by his/her voice. This will happen only when s(he) will talk about love and harmony. Morari Bapu is one saint who has been conveying the message of love, peace, harmony, fraternity, etc. Today when a number of saffron clad figures with aggressive posture, spewing venom, fanning hatred to polarise voters are at the forefront of politics of Hindutva it is a relief to see Morari Bapu in a different mould.

Nuclear reactors sought from French giant "not safe": Letter to Modi on Jaitapur project

Counterview Desk
Amidst reports that the French nuclear giant EDF has submitted a “techno-commercial offer” for the world’s largest nuclear power park proposed in Maharashtra’s Jaitapur nuclear power park in Jaitapur on the Maharashtra coast, Dr EAS Sarma, India’s former Union Secretary in the Minister of Power, and an eminent voice in the civil society, has written an open letter to Prime Minister Narendra Modi, who also heads Department of Atomic Energy (DAE),  protesting the move.

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.

Kerala land being acquired using "draconian, anti-people" National Highway Act, 1956

Counterview Desk
In a letter Chief Minister of Kerala Pinarayi Vijayan, senior activists and politicians have insisted that the Kerala government should not agree to "inhuman displacement and buid-operate-transfer (BOT) Toll system", imposed by the Government of India and the National Highway Authority of India, for widening the current National Highway (NH) 66.

Kaiga NPP expansion: Karnataka to get just 400 MW, but lose thick forest, fresh water

Counterview Desk
In an open letter to the chairman and members of the Atomic energy Commission (AEC) on the issue of Kaiga nuclear power plant (NPP) expansion plan in Karnataka, Shankar Sharma, well-known power policy analyst, has argued that that in case of expansion, the site will face “exponential increase in radiation emission risks”, underlining, “Nuclear safety experts identify such a scenario as enhanced risk for NPPs with multiple reactors and shared technical facilities."
Sharma says the questions that also be asked whether Karnataka should lose more than 54 hectares of thick forests and about 152,304 cubic meters of fresh water per day from Kali river for a meager benefit of 400 MW from the Kaiga NPP, for which “there are many benign alternative options available for the state at much lower overall costs to the state.”
Text of the letter: This has reference to the public hearing under the Environmental Impact Assessment (EIA) Rule 2006 of Ministry of Environment, Fore…

Uttarakhand High Court: Biodiversity boards can impose fees on Ramdev's Divya Pharmacy

By Mridhu Tandon
In a significant decision, the Uttarakhand High Court on December 21, 2018 has dismissed the writ petition filed by Divya Pharmacy founded by Baba Ramdev and Acharya Balakrishnan, challenging the demand of the Uttarakhand Biodiversity Board (UBB) imposing fees under the provisions of the Fair and Equitable Benefit Sharing (FEBS).

Modi becoming Prime Minister now appears to be an "accident" to the people of India

By Sandeep Pandey*
Anupam Kher's film 'Accidental Prime Minister' has targeted Dr Manmohan Singh who served for two terms and may be again acceptable for the job if his party regains power. But his tormentor Narendra Modi seems to be out of breath even before his first term is over. Disillusionment with him is so widespread and deep that people of India may not bear with him for another term. As the general elections approach again the difference between the two needs to be examined.