From Rajiv Awas Yojana (2011) To Pradhan Mantri Awas Yojana PMAY (2015): The Evolution Of Urban Housing In India – IMPRI Impact And Policy Research Institute

Policy Update
Bhavya

Introduction

With a lack of economic opportunities in rural India, India faces a critical problem of rapid urbanisation, driven by migration at a rate of 30 people per minute. In 2011, 30% of India’s population lived in urban areas. By 2030, this percentage is expected to go up to 40%, and the number of people living in India’s cities is expected to reach 630 million. (Press Information Bureau, 2022)  However, the cities aren’t ready to accommodate this many people, given inadequate urban planning and a shortage of affordable housing, which gives rise to slum formation. 

The first housing intervention done by the government was in 1985 with the launch of the Indira Awas Yojana, focused on rural housing. Soon, the government realized the needs in urban areas in the National Urban Housing and Habitat Policy (NUHHP) in 2007. This policy sought to promote the sustainable development of habitats in urban areas, with special focus on the needs of the urban poor. However, that policy lacked concrete specifications. So, the government launched the Rajiv Awas Yojana, the Rajiv Rinn Yojana, and the Pradhan Mantri Awas Yojana in recent years. (Chintan Patel et al., 2024)

Despite these efforts, one critical issue continues to undermine the impact of housing schemes—lack of secure land tenure. Without land titles, people fear that their houses in slums can be demolished at any time. It psychologically impacts residents and discourages them from investing in healthy living conditions. (Namesh Killemsetty, 2024) 

The resulting pressure on housing infrastructure necessitates robust and inclusive policy responses to prevent further proliferation of slums.

Background 

Rajiv Awas Yojana, launched in 2011 under the Ministry of Housing and Urban Poverty Alleviation, aims to create inclusive and equitable cities where citizens can access basic civic infrastructure, social amenities, and decent shelter. However, the scheme was discontinued in 2014. As per the notification issued by the Press Information Bureau, RAY only focused on creating a slum-free India and was not expansive in its coverage. 

Objectives 

1. Improve living conditions in slums by providing better housing, basic services like water and sanitation, and other community facilities.
2. Fix the root causes of slums by changing laws and policies that allow slums to form.
3. Make it easier for the urban poor to get loans from banks and financial institutions.
4. Stop new slums from forming by building more low-cost housing that people can afford.
5. Train and support government officials and staff at all levels (city, state, local) so they can do their jobs better.
6. Involve the community in planning and decisions by strengthening groups of slum residents and encouraging their participation.

Functioning 

Rajiv Awas Yojana was launched in two phases:

• Preparatory Phase (2011–2013)
• Implementation Phase (2013–2022)

The scheme covers all slums—whether notified or non-notified—including urbanized villages, pavement dwellers, and people experiencing homelessness. Beneficiaries are selected by states in consultation with the center. Priority is given to:

• Cities with large slum populations
• District headquarters and cities of religious, historic, or tourist importance
• Cities with significant SC/ST/minority populations

 Two-Step Implementation Strategy 

1. Slum-free City Plans of Action (SFCPoAs)

1.  A city’s plan is to improve or redevelop all its slums over the next 10–15 years. It includes building homes, providing water, sanitation, electricity, roads, schools, and other basic services for people living in slums.
2. Two-Part Strategy:
   1. Curative (Fixing current slums): Upgrading existing slums
   2. Preventive (Stopping future slums): Planning future housing needs to prevent new slums
3. States are responsible for implementing reforms, involving communities, partnering with private sector players, and strengthening institutions. Once finalized, SFCPoAs are reviewed and approved centrally.

2. Detailed Project Reports (DPRs)

1. DPRs include the following:
   1. Housing for slum dwellers
   2. Basic infrastructure like water, toilets, roads, drainage, lighting, garbage collection, etc.
   3. Social amenities such as schools, health centers, child care centers, and job training hubs
   4. Links to welfare schemes 
2. Types of Slum Improvement Approaches

Cities may choose among: 

1. In-Situ Development: Upgrading the slum where it is, so people don’t lose access to work and services.
2. Redevelopment: Tear down old structures and build new homes and infrastructure.
3. Upgradation: Improve existing homes and fill in service gaps without complete demolition.
4. Relocation: If a slum is unsafe (e.g., on a riverbank or railway line), people can be moved to a new location. But it must include: good transport links, access to jobs, and all basic services
5. Types of Housing Support:
   1. New Housing:  Affordable two-room homes with essential services
   2. Incremental Housing: Improvements for existing homes
   3. Rental Housing: Small, affordable units for migrants, workers, and the homeless

Construction may be undertaken either by beneficiaries themselves (with financial support) or by government agencies.

Funding 

Funding is shared between the Central Government, the State Government, ULBs (Urban Local Bodies), and the people (beneficiaries), depending on the size and location of the city, as follows: 

Source: Ministry of Housing & Urban Poverty Alleviation, 2013, p. 12

Reforms 

All participating states must:

• Provide 15-year renewable lease rights to eligible slum dwellers.
• Reserve a portion of the new housing for EWS/LIG groups.
• Allocate 25% of municipal budgets for services to the urban poor.
• Establish specialized municipal cadres for poverty alleviation.

Affordable Housing in Partnership (AHP) and Access to Credit 

AHP promotes large-scale affordable housing projects to prevent future slum formation.

To ease access to housing finance: 

• Rajiv Rinn Yojana (RRY): Offers interest subsidies for EWS/LIG housing loans.
• Credit Risk Guarantee Fund (CRGF): This fund guarantees small housing loans without collateral for low-income borrowers.

Administration and Implementation Structure

A three-tier system manages the scheme:

• National Level: Sets priorities and approves projects
• State Level: Coordinates implementation through nodal agencies
• City Level: Oversees project execution with technical support teams

Community participation is central, with Slum Dwellers’ Associations and city-level federations involved throughout planning and implementation.

Monitoring & Evaluation

Progress is tracked through:

• A web-based Integrated Poverty Monitoring System (IPoMS)
• Third-Party Inspections and Social Audits (covering 5–10% of projects)

It ensures transparency, accountability, and continuous improvement at the city, state, and national levels.

Rajiv Awas Yojana aims to create slum-free cities through a structured planning and redevelopment process. It emphasizes community involvement, shared funding, and institutional reform, ensuring that the urban poor live with dignity, security, and better access to services.

Impact

As of 31st December 2014,  54 pilot projects and 228 cities had been included (under the preparatory phase of RAY) with a total project cost of Rs. 2468.51 crore, of which the central share was Rs. 1361.84 crore.

Building on the groundwork laid by RAY, the government launched Pradhan Mantri Awas Yojana in June 2015 and subsumed all of its housing projects under the new mission. It addresses urban housing shortage among the Economically Weaker Section (EWS) / Low Income Group (LIG) and Middle Income Group (MIG) categories, including the slum dwellers, by ensuring a pucca house to all eligible urban households by the year 2022 (Press Information Bureau, 2022).

However, before RAY and PMAJ-U, Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was in place since 2005 and was initially planned for seven years from 2005 to 2012. It was later extended till March 2017.

Comparison with JNNURM & PMAY-U

Performance

The graph illustrates the proportion of the urban population living in slums from 2000 to 2022. There is a slow decline in the percentage of people living in slums, decreasing from 55% in 2000 to 49% in 2018. However, there was little change from 2018 to 2020. A notable decline was recorded post-2020, potentially indicating progress in meeting 2022 targets or reflecting statistical adjustments under India’s G20 Presidency.

Source: World Bank (2024)

Emerging Issues 

1. Around 2.17 houses made under JNNURM and RAY are vacant across the country.  Maharashtra tops the list, followed by Delhi, Gujarat, Andhra Pradesh, Telangana, and Uttar Pradesh. (SAHU, 2024)
2. The last census was conducted in 2011, lacking accurate data on slums and beneficiaries. Consequently, policymakers cannot make practical policy efforts.
3. Delays in providing housing or sudden suspension of home construction due to a lack of funds are causing distress among beneficiaries. (Kiran Narayanan, 2019)

Way Forward

 To truly address urban housing challenges, there is a need to:

•  Uphold the constitutional vision of ensuring dignity and adequate shelter by regularly updating slum and urban population data through detailed surveys, particularly in light of delays in the Census.
• Reinforce the state’s responsibility by introducing robust accountability mechanisms to guarantee the timely construction and delivery of housing.
• Fulfill the constitutional promise of dignified living by ensuring that constructed houses are physically complete and connected to essential services such as water, electricity, sanitation, and transport.
• Adopt a beneficiary-centric approach, ensuring transparency in allotment and ownership rights, especially for women and vulnerable groups.
• Promote rental housing as a viable model to accommodate seasonal migrants and informal workers.
• Encourage partnerships with NGOs, civil society, and the private sector to monitor, design, and implement housing schemes sensitive to local conditions.

As a country where adequate housing is a fundamental right under Article 21 of the constitution, these measures are not optional but essential for inclusive urban development.

Furthermore, the Union Budget 2025–26 reflects a renewed fiscal commitment to urban housing, with a 52% increase in allocation to the Ministry of Housing and Urban Affairs and targeted support for stalled affordable housing projects. These provisions signal the government’s continued pursuit of equitable urban development and present an opportunity to realign current efforts with the foundational aims of RAY, such as creating slum-free cities and securing tenure for all.

References 

About the Contributor 

Bhavya is a research intern at IMPRI Impact and Policy Research Institute, a third-year undergraduate pursuing a double major in Economics and Sociology at Christ University, Bangalore, Central Campus. 

Acknowledgement 

The author thanks Mrs. Aasthaba Jadeja, internship coordinator, for her guidance and support, and the review team — Riya Rawat, Suranjana, and Deepankshi Agnihotry — for their valuable feedback on earlier drafts

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.

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