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The Ministry of Finance has approved the release of funds for another six months until September 2024 under the government's flagship Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) rural housing scheme. This will enable the completion of around 3.5 million rural homes.
The government had set a target of constructing 29.5 million houses under the PMAY-G program by March 2024 to achieve its goal of "housing for all". Approval was granted to build nearly all of these targeted homes. About 26 million houses have already been constructed since November 2016 when the scheme was revamped from the previous Indira Awas Yojana.
In a recent communication to the Ministry of Rural Development, the Ministry of Finance clarified that the funds must only be used to meet existing commitments under PMAY-G as of March 31. No new approvals would be allowed under the scheme beyond March 31 or beyond the targeted 29.5 million houses for now due to the model code of conduct. The latest move does not contravene the Election Commission's model code of conduct, as the fund release is merely to honour past commitments.
Under the scheme, the Central government bears 60% of the construction cost in most states, increasing to 90% in North Eastern states and 100% for union territories, while state governments contribute the remaining amount.
The Centre will launch a revamped Pradhan Mantri Awaas Yojana- Grameen (PMAY-G) after general elections to build another 20 million affordable houses in the next five years with enhanced financial assistance. Under PMAY-G, the beneficiaries are provided financial assistance of INR 1.2 lakh in plain areas and INR 1.3 lakh in hilly states (including Northeastern states and UTs of Jammu & Kashmir and Ladakh), difficult areas and Integrated Action Plan (IAP) districts. Under the revamped scheme, the cash support will likely be enhanced to around INR 2.3-2.4 lakh/housing unit.
The government has saved around INR 22,000 crore in PMAY-G in the current financial year as some states were not eligible to get funds, either for failing the eligibility conditions or not implementing the scheme.
The government has budgeted INR 54,487 crore for PMAY-G in FY24, the highest annual allocation after the launch of the scheme in 2016. The allocation was revised down to INR 32,000 crore for FY24.
West Bengal, one of the big beneficiaries of the scheme in previous years, won’t get any funds for the scheme in FY24 due to violation of the norms for centrally sponsored schemes such as branding. About 1.1 million of the targeted 4.57 million houses in West Bengal remain incomplete. Telangana and Puducherry, which are not implementing PMAY-G, will also not receive any funds. Several other states are also unable to fully utilise the funds, sources said.
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