Rs 54,487 crore for PMAY-Gramin: Highest ever outlay to spur asset creation

The details available in the budget documents shows that out of Rs 79,000 crore allocated for the PMAY (Rural & Urban both), an amount of Rs 54,487 crore has been earmarked for the PMAY-Gramin.

The allocation of Rs 54,487 crore for the PMAY-Gramin is 172 per cent higher as compared to the allocation of Rs 20,000 crore in 2022-23. It is even higher than the Revised Estimates of Rs 48,422 crore for the year 2022-23. Of the allocation of Rs 54,487 crore, an amount of Rs 50,486.99 crore has been allocated for the programme component, while an amount of Rs 4,000 crore has been provided for interest payment to NABARD for EBR [Extra Budgetary Resources] loans.

The PMAY-Gramin is one of the schemes that plays a crucial role in asset creation in rural areas. It also gives a boost to the construction activities in villages and creates demand for building materials like cement and steel. The government had set a target of construction of 2.95 crore houses till 2024, out of which, 2.15 crore have been constructed till date. The figure is expected to reach 2.35 crore by the end of the current financial year (2022-23). In the next financial year, the Centre aims to construct 58 lakh houses under the scheme.

Apart from being one of the drivers of capital expenditure in rural areas, the scheme has yielded political dividends to the ruling BJP-led National Democratic Alliance in polls across states in recent years. This is the reason the government has not hesitated in allocating a big amount to the scheme. In 2022-23 fiscal, the government had used its emergency funds to top up the scheme allocation, as about 84 per cent of budgetary allocation was used in just seven months (April-October). After the Rural Development Ministry flagged the shortage of the funds, the government had approved an advance of Rs 13,000 crore for the rural housing scheme from the Contingency Fund of India. Later, the government allocated Rs 28,422 crore in the first Supplementary Demands for Grants during the winter session of Parliament.

The PMAY-Gramin’s allocation (Rs 54,487 crore) for 2023-24 is the highest ever since the scheme was launched in 2016 after the erstwhile Indira Awas Yojana (IAY) was restructured to provide ‘housing for all’ by 2022. However, later the deadline was extended to 2024.

The PMAY-Gramin generates employment both directly and indirectly. Generally, the labour component in a house construction is about 25 per cent, said a source at the Ministry of Rural Development. The source said that about 440.72 crore ‘unskilled person days’ have been generated under the PMAY-Gramin and the erstwhile IAY. The source further said that in addition to direct employment, indirect employment has also been created under the PMAY-Gramin.

The PMAY-Gramin aims to provide ‘pucca’ houses with a minimum area of 25 sq m with basic amenities to people in rural areas who are homeless or live in ‘kutcha’ and dilapidated houses. For construction of one PMAY-Gramin house of 25 sq mt (267 sq ft), on an average, require 9,000 bricks, 110 cement bags, 750kg steel, 12 cubic metre (cmt) sand, 40 mm 3 cmt metal, and wood/steel for four doors, four windows, a source said.

In addition to a big jump in the PMAY-Gramin budget, the government has retained the allocation of Pradhan Mantri Gram Sadak Yojna (PMGSY) at Rs 19,000 crore for financial year 2023-24. After NREGS and PMAY-Gramin, the PMGSY is the third biggest scheme of the Rural Development Ministry.

The higher allocation for the PMAY-Gramin and maintaining the allocation of PMGSY at the last year’s level is significant in view of the government focus on capital expenditure.

The government has allocated Rs 70,000 crore for Jal Jeevan Mission, which is higher than the allocation of Rs 60,000 crore made in 2022-23. However, the allocation of Jal Jeevan Mission was reduced to Rs 55,000 crore at the time of RE for the current financial year (2022-23).

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