The Crossbill Team
A parliamentary standing committee has raised concerns over high inflation, urging the central government to increase financial assistance under the Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0.
According to a report in The Wire, the committee highlighted that rising construction costs have made it difficult for low-income, middle-income, and economically weaker sections to afford housing, even under the government-backed scheme.
The Standing Committee on Housing and Urban Affairs, chaired by Telugu Desam Party (TDP) MP Magunta Sreenivasulu Reddy, presented its third report on the Demand for Grants 2025-26 in the Lok Sabha on Wednesday (March 12).
PMAY-U 2.0 Faces Challenges Amid Rising Costs
The report emphasized that post-COVID inflation has significantly increased construction costs, making homeownership unaffordable for the targeted groups—Economically Weaker Sections (EWS) (annual income up to Rs 3 lakh), Lower Income Groups (LIG) (Rs 3-6 lakh), and Middle Income Groups (MIG) (Rs 6-9 lakh).
Since the bulk of the construction cost is borne by beneficiaries, the committee noted that finding investors under the Affordable Housing in Partnership (AHP) vertical of PMAY-U could also be a challenge.
“In view of this, the committee strongly feels that central assistance per dwelling unit under Affordable Housing in Partnership (AHP) vertical need to be revised proportionally under PMAY-U 2.0 to reflect the increased construction costs and also to ensure the successful implementation of the scheme,” the news website quoted the report as saying.
To address this issue, the panel recommended that central assistance per dwelling unit be increased proportionally to match the rising costs and ensure the scheme’s success.
Currently, the central government provides Rs 1.5 lakh per house under the Beneficiary Led Construction (BLC) and AHP verticals. In PMAY-U 2.0, a minimum of Rs1 lakh is mandatory for all major states, effectively ensuring each beneficiary gets Rs 2.5 lakh, excluding additional state contributions.
The committee also flagged concerns over outdated data on homeless populations, which relies on the 2011 Census. It urged the government to conduct a fresh and comprehensive survey to accurately determine the current number of homeless individuals, ensuring that the objective of ‘Housing for All’ is met.
Need for New Urban Employment Schemes
The report also highlighted urban unemployment, particularly in the wake of the closure of the Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) in 2024.
“With the increasing urban population, unemployment is also expected to rise,” the report noted.
“The complete revocation of funds for the Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) has exacerbated this issue. The committee is also concerned about the skill centres, self-help groups and homeless centres that were running with the support of DAY-NULM,” the report added, reported The Wire.
The committee expressed concern over the impact on skill centers, self-help groups, and homeless shelters that relied on DAY-NULM funding. It strongly recommended that the government relaunch the mission and introduce new direct employment-generating schemes to tackle urban joblessness.
According to a report in The Wire, the committee highlighted that rising construction costs have made it difficult for low-income, middle-income, and economically weaker sections to afford housing, even under the government-backed scheme.
The Standing Committee on Housing and Urban Affairs, chaired by Telugu Desam Party (TDP) MP Magunta Sreenivasulu Reddy, presented its third report on the Demand for Grants 2025-26 in the Lok Sabha on Wednesday (March 12).
PMAY-U 2.0 Faces Challenges Amid Rising Costs
The report emphasized that post-COVID inflation has significantly increased construction costs, making homeownership unaffordable for the targeted groups—Economically Weaker Sections (EWS) (annual income up to Rs 3 lakh), Lower Income Groups (LIG) (Rs 3-6 lakh), and Middle Income Groups (MIG) (Rs 6-9 lakh).
Since the bulk of the construction cost is borne by beneficiaries, the committee noted that finding investors under the Affordable Housing in Partnership (AHP) vertical of PMAY-U could also be a challenge.
“In view of this, the committee strongly feels that central assistance per dwelling unit under Affordable Housing in Partnership (AHP) vertical need to be revised proportionally under PMAY-U 2.0 to reflect the increased construction costs and also to ensure the successful implementation of the scheme,” the news website quoted the report as saying.
To address this issue, the panel recommended that central assistance per dwelling unit be increased proportionally to match the rising costs and ensure the scheme’s success.
Currently, the central government provides Rs 1.5 lakh per house under the Beneficiary Led Construction (BLC) and AHP verticals. In PMAY-U 2.0, a minimum of Rs1 lakh is mandatory for all major states, effectively ensuring each beneficiary gets Rs 2.5 lakh, excluding additional state contributions.
The committee also flagged concerns over outdated data on homeless populations, which relies on the 2011 Census. It urged the government to conduct a fresh and comprehensive survey to accurately determine the current number of homeless individuals, ensuring that the objective of ‘Housing for All’ is met.
Need for New Urban Employment Schemes
The report also highlighted urban unemployment, particularly in the wake of the closure of the Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) in 2024.
“With the increasing urban population, unemployment is also expected to rise,” the report noted.
“The complete revocation of funds for the Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) has exacerbated this issue. The committee is also concerned about the skill centres, self-help groups and homeless centres that were running with the support of DAY-NULM,” the report added, reported The Wire.
The committee expressed concern over the impact on skill centers, self-help groups, and homeless shelters that relied on DAY-NULM funding. It strongly recommended that the government relaunch the mission and introduce new direct employment-generating schemes to tackle urban joblessness.
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