To meet the needs of states, the Pradhan Mantri Awas Yojana gets an additional Rs 13,000 crore

Months after the Union Ministry of Rural Development (MoRD) identified a paucity of funds to implement the Pradhan Mantri Awas Yojana-Grameen (PMAY-G), the Union Finance Ministry has approved an advance of Rs 13,000 crore for the rural housing scheme. Contingency Fund of India, it is learned.

The Rs 13,000-crore gap in the Rs 20,000 crore outlay provided for PMAY-G in Union Budget 2022-23 has been closed.

The government has set a target of construction of 52.78 lakh houses under this scheme in 2022-23.

In the first seven months (April-October 2022), the Ministry of Rural Development has utilized Rs 16,785 crore out of Rs 20,000 crore under the PMAY-G scheme – about 84 per cent. Other schemes of the ministry like PMGSY (Pradhan Mantri Gram Sadak Yojana), which has an almost equal budget allocation (Tk 19,000 crore) have been able to utilize only 40 per cent and National Rural Livelihood Mission (NRLM) only 25 per cent. During the same period under NREGS, a demand-driven rural employment guarantee scheme, 74 percent of the allocated funds were utilized in the first seven months.

With several states demanding additional funds for construction of rural houses, the MoRD approached the finance ministry in June for additional allocation. On June 8, 2022, Rural Development Secretary Nagendra Nath Sinha wrote to Finance Secretary TV Somanathan and highlighted that the budget allocation of Rs 20,000 crore was “not sufficient” to meet the “anticipated” needs of states and Union Territories (UTs) during the year PMAY-G. 52.78 lakh rural houses will be constructed under the scheme, The Indian Express has learnt. Sinha requested him to pay an additional Rs 28,422 crore.

Under PMAY-G, a financial assistance of Rs 1.20 lakh in plains and Rs 1.30 lakh in hill states is provided to a beneficiary. As per scheme guidelines, the financial burden of implementation of the scheme is shared by the Center and TET in the ratio of 60:40 for the plains and 90:10 for the hill states (special category states which include 8 North Eastern states, Himachal Pradesh, Uttarakhand and J&K). The Center bears 100 percent of the cost of implementing rural housing schemes in Union Territories including Ladakh.

The current NDA government, in its first term, revamped the earlier rural housing scheme and launched PMAY-G from April 1, 2016 with a target of providing “housing for all” by 2022. Construction target of 2.95 crore PMAY-G houses by March 2024, of which 2.07 crore rural houses.


Top spender in rural development

PM Awas Yojana is the top spender among the rural development ministry in the first seven months of this year – even better than the employment guarantee scheme, NREGS. It sought additional funding in the first quarter and has now received more than two-thirds of the money allocated when the budget was presented.

“In fact, the target of construction of 2.02 crore rural houses under PMAY-G till August 15, 2022 has been achieved,” said a source.

To meet the March 2024 target, 52.78 lakh houses need to be built in 2022-23 and 57.34 lakh houses in 2023-24 financial year. According to MoRD estimates, a central share of Rs 48,422 crore will be required to meet the target of 52.78 lakh houses in 2022-23. However, only Rs 20,000 crore was allocated in the 2022-23 budget.

Budget documents show that out of Rs 20,000 crore, only Rs 15,999.99 crore was earmarked for the scheme component, while Rs 4,000 crore was earmarked for interest payments to NABARD in the form of extra budgetary resources.

Sinha wrote to Somanathan again on October 18, 2022 and highlighted that the budget allocation for PMAY-G has always been “much less than the required funds every year” and requested him to pay at least Rs 15,000 crore before the next supplementary demand. Grants so that the central part can be left to the states. The Finance Ministry finally notified the MoRD on October 31, 2022 of the advance sanction of Rs 13,000 crore from the Contingency Fund of India.

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