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

Communal rhetoric? Hindutva preached by RSS-BJP is 'monolithic', not Hinduism

By Prem Verma*  I am a devout Hindu but not a believer of RSS Hindutva form of Hinduism which brings about hatred of other religions. My Hindu religion has not taught me to look down on other religions and neither has it instilled in me to go about converting others to my religion because my religion is superior.

Gross 'injustice' to children: Rs 5000 cr cut in education budget; 15 lakh schools shut down

Counterview Desk  More than 100 dignitaries, including educationists, academia, social activists, teachers’ union, civil society organisations (CSOs), various networks and people working on child rights, in a letter to Union Finance Minister Nirmala Sitharaman have sought reversal of reduction in allocation for education in the Union Budget 2021-22, even as demanding substantial increase in it.

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

Nalanda mahavihara 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".

India sees 62 journo deaths, 4th highest, amidst pandemic: Swiss media rights body

By Our Representative The Switzerland-based media rights body Press Emblem Campaign (PEC) has noted that India is the fourth most affected country as far as mediapersons’ death on account of Covid-19 is concerned. According to Blaise Lempen, secretary-general of PEC, the global tally of casualties among media persons in the Covid-19 pandemic has reached 1,036 journalists in 73 countries till date.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

RSS love for 'killer' Myanmar junta behind Indian military presence at Tatmadaw Day?

By Shamsul Islam*  If a shameful act means an action which is criminal and nauseating, it would be an understatement to describe the attitude of the present RSS-BJP rulers of India towards the demolition of democracy and large-scale killing of the people of Myanmar by the military ( tatmadaw ) junta which took power through a coup on February 1, 2021 after renegading the election results in which the party of Aung San Suu Kyi, National League for Democracy, was a clear winner.

Chhattisgarh’s Apra riverfront imitates Sabarmati: 'Devaluing' water, environment

Sabarmati riverfront By Mansee Bal Bhargava*  This year’s #WorldWaterDay (March 22) focus was on ‘Valuing Water’. My school friend, Pragati Tiwari from Bilaspur, Chhattisgarh, called that day knowing my interest in water matters. We were remembering our childhood days as how we used to play on the banks and the bed of the Arpa Nadi (River) during the summer holidays and as how the river would swell like Anaconda to flow happily during the monsoon.

Bihar massacre on Holi day: Brahminical, casteist mindset behind 'uneasy' silence

Bihar chief minister Nitish Kumar By Vidya Bhushan Rawat*  Several people were killed in Bihar amidst Holi festivities, but not much response has come in from the media. The silence of the government and the society as a whole is also appalling. We seek to romanticise these festivals, yet we forget that every year they take so many lives. This despite the fact that Holi appears to be the best time for 'avenging things'.

India's draft migrants policy: Whither concern on job restrictions imposed by states?

By Anil Kumar*  India’s Niti Aayog has prepared a Draft Migration Policy. The draft policy acknowledges migration as an integral part of development, and it calls for positive government interventions that facilitate internal migration. With a rights-based solution to migration, the draft states that the policy should “enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive”.

Gujarat religious freedom amendment bill 'pursues' votebank politics, is anti-minority

Gujarat home minister Pradeepsinh Jadeja  By Our Representative  A Gujarat-based minority rights organisation, taking strong exception to the state assembly last week passing the Gujarat Religious Freedom (Amendment) Bill, 2021, has asserted that the proposed law “is completely unconstitutional”, even as asking the Gujarat governor to give his accent to it.