Six years & PMAY(Urban) still moves at snail’s pace
Six years since its launch, the government’s flagship Pradhan Mantri Awas Yojana (Urban), a programme to provide "Housing for All" by the year 2022, has met with limited success with only 31 per cent of the sanctioned houses getting completed and 27 per cent occupied. Of the investment in projects, the central government has sanctioned 26 per cent funds, but released only 10 per cent.
Under the PMAY(U), the central government has sanctioned 1.03 crore houses since 2014. Of this, 60.51 lakh houses, or 58.7 per cent, of the sanctioned houses, have been grounded for construction, as per the Ministry of Housing and Urban Affairs data. Of these sanctioned houses, construction of a meagre 31 per cent, or 32.07 lakh houses, have been completed. Of this, only 28.61 lakh houses have been occupied. This also included incomplete houses of the earlier Jawaharlal Nehru National Urban Renewal Mission.
As for financial assistance to the scheme, of the Rs 6.16 lakh crore investment in PMAY(U) projects, the Centre has sanctioned Rs 1.63 lakh crore, but has released only Rs 64,000 crore.
House completion velocity under PMAY-U has been slower than initially envisaged, finds Icra. Low budgetary allocations and high reliance on nonbudgetary funding sources have been some of the reasons behind the slower implementation of PMAY-U.
Moreover, given that a considerable part of the affordable housing being developed in the urban segment is under publicprivate partnership models, in which the construction of the associated project phases and common infrastructure typically takes around twothree years, the recording of house completions has remained low during the initial years of such projects, according to Icra.
“For successful and timely implementation of the mission, the overall ecosystem for project execution, particularly in terms of land availability and project approvals, needs to be strengthened
A steep revision in property premium rates by national reinsurer GIC Re and a revision in the mandatory motor third premium rates by the insurance regulator have helped the non-life insurance companies to beat the slowdown witnessed in other key segments such as motor own damage, engineering and marine, thereby clocking an overall growth of 15 per cent for the nine months of this fiscal.
The non-life insurance companies underwrote a gross premium of Rs 1.42 lakh crore during April to
December 31, 2019 compared to Rs 1.23 lakh crore during the same period a year ago. Surprisingly while private players such as ICICI Lombard, HDFC Ergo General, Tata AIG and Cholamandalam stayed away from the risky crop insurance business, the four public sector general insurance companies, Agriculture Insurance
Company and the remaining private players aggressively wrote crop insurance to boost their topline which saw the segment seeing a 27 per cent growth during the nine months of this fiscal to Rs 26486 crore.
The four PSU insurers— New India Assurance, Oriental Insurance, National Insurance, United India— clocked 74 per cent growth in crop insurance to Rs 6,197 crore up to December 2019.
Mirroring the slowdown in auto sales, the motor own damage insurance portfolio grew by a mere 1 per cent to Rs 19,919 crore while the motor third party premium portfolio grew by 15 per cent Rs 31,166 crore.
The insurance regulator that regulates the rates the mandatory motor third party premium rates had increased the rates by 12 to 21 per cent for cars and bikes besides allowing insurers to float long-term policies which helped the business. The national reinsurer GIC Re in February 2019 had passed an endorsement stating that insurers wanting to use its treaty (an arrangement where capital is pooled by various reinsurers to support insurance firms) will have to quote higher premium rates from March 1 for providing covers to companies in 8 sectors that were reporting high claims.