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A Detailed Guide to Pradhan Mantri Awas Yojana (PMAY)

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The Pradhan Mantri Awas Yojana (PMAY) is a flagship social welfare programme undertaken by the Indian Government to provide ‘housing for all’. It was launched by the Honourable Prime Minister of India in June 2015 and aims to provide a roof over the head of every Indian family by 2022.

What is PMAY?

The Pradhan Mantri Awas Yojana (PMAY) scheme is an attempt of the central government to provide housing for the weaker sections of the society at an affordable price. It includes people from the Economically Weak Section (EWS), Low Income Group (LIG) as well as Mid-Income Group (MIG).

There are two elements of the PMAY:

  1. PMAY- Urban
  2. PMAY- Rural

Under both these schemes, the government aims to construct approximately 20 million houses. The deadline for this project is set for 31st March 2022. The Indian Government is touted to spend around Rs. 2.15 Lakh Crore for this scheme.

Components of PMAY

The PMAY scheme comprises of four primary components:

  • In-Situ Redevelopment

The existing slums in various cities will be redeveloped with the help of the private sector. The primary focus of this mission is to leverage the current land resource of the slum areas to provide decent urban housing for slum dwellers.

  • Credit-Linked Subsidy

Beneficiaries of this scheme may avail credit-linked home loan subsidy of various amounts depending on the annual household income. The basic premise of this project is that the Government will provide an interest subsidy of up to 6.5% on home loan for a period of up to 15 years. Furthermore, the Net Present Value or NPV of this subsidy is calculated at 9%.
Rs. 6 Lakh is set as the limitation for which this subsidy is eligible. The housing rate interest rate subsidy is directly linked to the beneficiaries’ bank account, which in turn, translates to a lower EMI amount. This lucrative scheme is one of the most encouraging reasons why you should opt for a home loan.

  • Affordable Housing in Partnership (AHP)

Government of India in collaboration with various state and UT governments will provide affordable housing solutions to India’s economically disadvantaged groups. Private and public sector companies may also be involved in this project.

  • Direct Financial Assistance

Those who do not fall under the ambit of any of the previous schemes will receive immediate financial support of Rs. 1.5 Lakh to renovate new houses or renovate existing ones. The homes constructed under this scheme will use eco-friendly technology, and old/disabled people will be given preference while allotting the ground floors of these houses.

How Will the PMAY Scheme Help Economically Disadvantaged People?

There is a massive gap between the demand and supply of housing for a large section of Indian society. On one hand, there is an over-abundance of properties in higher price brackets (above Rs. 30 Lakh), while on the other there is a massive shortfall of affordable houses (below Rs. 15 Lakh). PMAY is a step to address this ever-widening gap by providing home loan interest rate subsidies as well as direct financial assistance.

This scheme is also linked with other welfare programmes which can substantially improve the lives of millions of individuals –

  • Swacch Bharat Abhiyan: To eliminate open defecation by building community-owned and in-house toilets as well as promote eco-friendliness
  • Ujjwala Yojana: For LPG connection.
  • Suabhagya Yojana: For electrification.
  • Pradhan Mantri Jan Dhan Yojana: To bring every individual within the banking infrastructure.

In conclusion, adequate housing is a basic need that needs to be fulfilled at all costs. The PMAY scheme is a much-needed welfare programme which has the potential to fill that need and benefit millions of families in India.

Additional Read: A Brief About Pradhan Mantri Awas Yojana Eligibility Criteria