YSR initials added to the name of a flagship rural housing scheme is costing Andhra Pradesh dearly

Andhra Pradesh CM Y.S. Jagan Mohan Reddy handing over registration documents of TIDCO houses after inaugurating PMAY-YSR Jagananna Nagar, at Gudivada, in Krishna district on June 16, 2023. Photo: Handout

Three small letters — YSR — added to the Union government’s flagship rural housing scheme, thus rebranding it to the Pradhan Mantri Awas Yojana-YSR, are proving costly for Andhra Pradesh.

According to sources, the State’s decision to add the ruling YSR Congress’ initials to the scheme’s name has resulted in the Union Finance Ministry putting a temporary hold on ₹4,000 crore that the State should get under a scheme for “special assistance to state for capital investment”, apart from pending PMAY-Gramin funds worth ₹1,300 crore. In fact, the funds have still not been released despite the State government agreeing to remove its branding and logo from the scheme.

For an identical violation in West Bengal, where the State government rebranded the scheme as the Bangla Awas Yojana, Central funds have not been released since 2022. This financial year too, funds were not released to West Bengal, due to the “non-submission of satisfactory compliance of the directives of the ministry.”  

Centrally-sponsored schemes are funded by both Central and State governments, in a 60:40 ratio.

‘Core features unalterable’

The Union Rural Development Ministry wrote its first letter flagging Andhra Pradesh’s violation on July 17, noting that instead of PMAY-G, the State had called the scheme PMAY-YSR, and used its own logo alongside the Union government’s logo.

On August 7 and 8, Union Rural Development Secretary Shailesh Singh wrote to the State’s Chief Secretary K.S. Jawahar Reddy, noting that the “core features” of centrally sponsored schemes, including PMAY-G, are “unalterable and funds from Government of India can flow only if the core features of the scheme are adhered to in entirety.” He also sought to remind the State of the guidelines issued by the Department of Expenditure, Ministry of Finance, which lays this down as an entry condition in the scheme for “special assistance to state for capital investment”.

“While we do acknowledge the contribution of the state of Andhra Pradesh in providing state top-up and sand for construction, it is essential to acknowledge and preserve the uniformity of the PMAY-G by not altering the design of the scheme which has been approved by the Union Cabinet,” Mr. Singh wrote on August 8.

State tops up funds

PMAY-G provides ₹1.3 lakh for each unit constructed under the scheme, with a 60:40 split in funding from the Centre and State. Over and above this amount, A.P.’s Housing Secretary Ajay Jain says that the State provides a top-up of ₹70,000 per unit and also free sand for the construction. The State is chasing a target of building 1.79 lakh homes by a deadline of March 2024, when the scheme is expected to be completed nationally. The State had written to the Union government, proposing co-branding of the scheme, but its proposal was shot down.  

“As you would be aware, the state top up which is over and above the state share is provided by a few other states too. These states continue to use the design and PMAY-G logo to showcase the achievements of the scheme thereby upholding unitary spirit. In the past, deviation from the unalterable core features of the scheme has resulted in stoppage of funds from the government of India,” the Union Rural Development Secretary wrote on August 8.

A reminder was sent on August 30, seeking a compliance report within a week, “failing which there will be no release of central funds under PMAY-G to the state,” the Ministry said in no uncertain terms. This letter was also copied to Union Finance Secretary T.V. Somanathan. A flurry of exchanges followed between the State and Centre.

Checking compliance

On October 16, the State gave in, with Mr. Jain writing to the Centre with an assurance that the “YSR” initials and the State’s own logo had both been withdrawn. He also requested that the Ministry of Finance should be informed about the compliance. 

According to sources, however, its compliance has not got the State off the hook. A national level monitoring team has been dispatched by the Union Rural Development Ministry to ten districts of Andhra Pradesh, to check that the State government has indeed removed the initials “YSR” from PMAY-G houses, and withdrawn its own logo. Pending the report, the funding situation remains in a flux for the State.