Allocation of houses under centrally sponsored schemes increasingly reflects negotiation rather than formula. Critically examine with reference to PMAY-G 2.0.

PMAY-G 2.0 will fund 2 crore additional rural houses over FY 2024-25 to 2028-29. Its outlay of ₹3,06,137 crore is shared roughly 2:1 between the Centre and the States [2]. Andhra Pradesh's recent allocation suggests that bargaining now shapes how big a State's quota is. However, the scheme's formula-based core is still intact.

Evidence of negotiation

• Discretionary scale-up: Officials proposed 76,000 houses for AP. On the Chief Minister's request this rose to 3 lakh houses (₹3,600 crore), and 6 lakh more have been sought [1].
• Package politics: The handover came alongside central commitments on Amaravati and Polavaram. This points to a wider Centre–State deal rather than ranking States by need [1].
• Weak transparency: The increase was credited to the CM's request, not to a published housing-backlog figure [1]. Other States therefore cannot predict their own share.

Evidence that formula still governs

• Deprivation-based lists: PMAY-G 2.0 aims to cover everyone left on the Awaas+ (2018) list and the SECC 2011 Permanent Wait List. Beneficiaries are chosen from data, not through lobbying [2].
• Fixed unit norms: The government pays ₹1.20 lakh per house in the plains and ₹1.30 lakh in NER and hill States. AP's 3 lakh houses for ₹3,600 crore match the plains rate exactly [1][2].
• Capacity sets the real limit: In 2024-25 only 4 lakh of the 84 lakh targeted houses were completed. One reason is that States release their shares near the end of the financial year [3]. The Centre has said AP's next tranches depend on completing the current houses [1].
• Matching share limits bargaining: Every extra house sanctioned needs State money, so a State's own budget caps how much it can win through negotiation [2].

Concerns

• Bargaining may favour politically aligned States and erode horizontal equity between States.
• Sanctions that outrun delivery inflate headline numbers. The CAG found that 43% of houses checked in Odisha were shown as complete but were not finished [3].

Way forward

• Publish State-wise allocation criteria linked to the Awaas+ backlog.
• Release tranches only after physical checks that houses are complete, and have States release their share through the year [3].
• Raise unit assistance, as the Standing Committee on Rural Development (2024) recommended [3].

Negotiation does affect the size and timing of State quotas, but beneficiary selection and unit costs remain rule-bound. Transparent, backlog-linked criteria and completion-based releases would turn bargaining into genuine cooperative federalism, advancing "Housing for All" and SDG 11.