Blog

Overview of Pradhanmantri Awas Yojana: Objectives and Key Features

The Pradhanmantri Awas Yojana (PMAY) was launched in 2015 with the objective of providing affordable housing to the urban poor in India by the year 2022. The scheme aims to ensure that every family has a roof over their head, in line with the government’s vision of ‘Housing for All’. By 2025, the initiative is expected to evolve further, expanding its reach and benefits to more citizens.

Key features of the PMAY include subsidy schemes for home loans, the provision of affordable housing units, and the integration of technology in construction to enhance efficiency. The program is designed to cater to economically weaker sections, low-income groups, and middle-income groups, thereby promoting inclusive growth.

Eligibility Criteria: Who Can Benefit from the Scheme?

To qualify for the Pradhanmantri Awas Yojana, applicants must meet specific eligibility criteria as given Below:

1. Families belonging to EWS/LIG/MIG category, living in urban areas, having no pucca house anywhere in the country, are eligible to purchase or construct a house under PMAY-U 2.0.
2. The beneficiary who has been allotted house under any of the housing scheme of Central Government, State/UT Government and Local Self Government in last 20 years in urban or rural areas, shall not be eligible to seek benefit under PMAY-U 2.0.
3. EWS households are defined as households with an annual income of up to ₹3 lakh. LIG is defined as households with an annual income from ₹3 lakh up to ₹6 lakh. MIG is defined as households with an annual income from ₹6 lakh up to ₹9 lakh.

The scheme also prioritizes women, with provisions to encourage female ownership of homes. Furthermore, the eligibility criteria might include factors such as the applicant’s age and the location of the property, ensuring that the benefits are targeted effectively.

Interest Subsidy Scheme (ISS)

The Mission, will implement Interest Subsidy Scheme (ISS) vertical as a Central Sector Scheme to expand institutional credit flow to the affordable housing sector. Subsidy will be provided on home loans sanctioned and disbursed on 01.09.2024 or after to eligible beneficiaries of EWS/LIG and MIG for purchase/ re-purchase/construction of houses.

Households belonging to EWS, LIG and MIG category with an annual income of up to ₹3 lakh, ₹6 lakh and ₹9 lakh, respectively will be eligible to avail the benefit of the Scheme. For identification as an EWS/LIG/MIG beneficiary under the Scheme, an individual loan applicant will submit self-certificate/affidavit as proof of income.

A maximum release of interest subsidy of ₹1.80 lakh having maximum NPV of ₹1.50 lakh (at Discount Rate of 8.5%) shall be provided to eligible beneficiaries having a loan tenure of more than five years. Households having income up to ₹9 lakh, loan value up to ₹25 lakh for property value up to ₹35 lakh would be eligible for a subsidy at 4.0 % on first ₹8 lakh for a tenure up to 12 years. The carpet area of houses under this component shall be up to 120 sqm. Subsidy to the beneficiaries will be released in 5 equal yearly instalments.

The broad features and eligibility criteria of the Interest Subsidy Scheme are provided in below table

Future Prospects: The Impact of Pradhanmantri Awas Yojana on Affordable Housing in India

Looking ahead, the Pradhanmantri Awas Yojana is poised to have a significant impact on the affordable housing landscape in India. As urbanization continues to rise, the demand for affordable housing will only increase. The scheme’s expansion and adaptation to meet the evolving needs of the population will be crucial in addressing housing shortages.

Moreover, with the government’s focus on sustainable development and smart cities, PMAY is likely to incorporate more eco-friendly building practices and innovative designs. This could lead to not only a rise in homeownership but also enhance the overall quality of living in urban areas, contributing to India’s economic growth and social stability.