Show construction progress to avail PMAY funds: Maharashtra civic bodies

Beneficiaries are now required to show the progress of the house before requesting release of funds at each stage of the construction.
(Photo Credit: Atikh Rashid)

Learning from earlier adverse experience, civic bodies in Maharashtra have now changed the pattern of releasing the subsidy under the Pradhan Mantri Awas Yojana (Urban) to the beneficiaries to ensure the money is not diverted from the intended purpose of the house construction.

Beneficiaries are now required to show the progress of the house before requesting release of funds at each stage of the construction.

Earlier, civic bodies in the state – acting upon guidelines of the Maharashtra Housing and Area Development Authority (MHADA) – were releasing advance subsidy to beneficiary families constructing houses under the BLC (Beneficiary Led Construction) component of the PMAY(U) to ensure fast progress of the projects.

However, this policy led to a considerable number of beneficiaries (about 20-25 per cent, as per MHADA officials) diverting the funds for other purposes, thus stalling the progress of construction. In several towns and cities in the state, PMAY(U) projects have not reached completion despite being under progress for one, two or more years.

The Covid-19 pandemic and the lockdown imposed between March and August resulted in a drastic reduction in earnings of economically weaker families – the target demographic for the BLC component – and may have further led to diversion of the funds received from the state and central governments to ensure livelihood.

“Considering past experience, we have decided to release the subsidy amount only after progress is shown at each stage,” Karbhari Divekar, Chief Officer, Pathri Municipal Council in Parbhani district. “Previously, we had deposited an upfront amount of Rs 40,000 in the accounts of the 1,050 beneficiaries when we gave them the building plan sanctions. But about 300 didn’t commence work,” he added.

In Pathri, new 1550 PMAY(U) beneficiaries whose names appear in the latest BLC project plan, have been asked to commence the work on the homes and that they will receive the first installment of Rs 40,000 after the foundation work is done, additional Rs 60,000 when the work progresses until lintel-level and rest Rs 1.50 lakh after the work finishes.

The beneficiaries are not too enthused about this strategy. “I will have to borrow money from private sources to start the work as I don’t have money to put in. As per the new strategy, only those who are well-off or have savings will be able to take advantage of the scheme,” said Laxmikant Ambure, a beneficiary.

Central subsidy released in some towns

Following The Indian Express report highlighting the status of the work on 1,150 houses sanctioned for PMAY(U) beneficiaries in several towns of the Marathwada region, MHADA – the state coordinating agency for PMAY(U) – has released the central subsidy for some of the towns.

As per officials with Parbhani, Hingoli and Pathri municipal bodies, some central funds have been received in the recent weeks, enabling them to release the 3rd and 4th installment of the funds to the beneficiaries.

Officials with Hingoli Municipal Council said they have received Rs 3.33 crore of the central subsidy while those in Pathri said they have received Rs 5 crore. “We had to wait for long. People really suffered as the work got stalled due to unavailability of funds. We hope that in future, the central funds will be released in a timely manner,” said Divekar.

As reported earlier, the release of central funds for the BLC component has been severely delayed owing to failure of a section of the Urban Local Bodies (ULB) to submit the utilisation certificates (UC) for amounts earlier released.

Although MHADA’s Dilip Muglikar, who is in-charge of PMAY(U) implementation in the state, did not comment, officials in the Ministry of Housing and Urban Affairs (MoHUA) said they are still awaiting the submission of UC’s from Maharashtra.

“Of the total Rs 803 crore released, we have received the UC’s only for Rs 211 crore. The amount for which the UCs are due is close to Rs 550 crore. We won’t be able to release additional funds until we get UC’s for at least 80% of this amount,” said the a Ministry official who did not wish to be named