The Government of India launched the Pradhan Mantri Awas Yojana (PMAY) in June 2015. Envisioning ‘Housing For All’ by 2022, it extensively stresses on providing low-cost pucca homes to both the urban and rural poor. These homes come equipped with basic amenities such as water supply, sound sanitary conditions, and round-the-clock electricity.
This government flagship program provides housing for both urban and rural (Gramin) areas of the country. While the urban scheme is commonly known as PMAY-U, the rural scheme is known as PMAY-G. Although the goals for the two are aligned (i.e. to procure affordable housing), there are still some key differences between the two on multiple grounds.
The requirements are directed at 4 main verticals for the PMAY-U scheme.
- Rehabilitation of slum dwellings with contributions from private developers
- Promotion of Affordable Housing for the weaker section of society through credit linked subsidy schemes (CLSS)
- Affordable Housing in partnership with public & private sectors
- Subsidy for beneficiary-led individual house construction /enhancement
Much more myopic in nature, PMAY-G focuses on providing low-cost pucca homes to the homeless in rural areas.
Eligibility Criteria For Availing Benefits
PMAY-U primarily extends to:
- Economically Weaker Section – People with an annual income ranging up to INR 3 L. The maximum interest subsidy provided is 6.5% on a maximum loan amount of up to INR 3L.
- Lower Income Group (LIG) – People with an annual income ranging between INR 3-6 L. The maximum interest subsidy provided is 6.5% on a maximum loan amount of up to INR 6L
- Middle Income Group I (MIG1)- Annual income within INR 6L – 12L. The maximum interest subsidy provided is 4% for a maximum loan amount of INR 6L – 12L.
- Middle Income Group-II (MIG2) – Annual income within INR 12L-18L. The maximum interest subsidy provided is 3% for a maximum loan of INR 12L.
PMAY – G application form is not available for registration under the scheme. The rightful beneficiaries are chosen by the Gram Sabha, as per the data collected on the national level census conducted in 2011. This census was named as “Socio-Economic and Caste Census” of 2011 (SECC 2011). The main aim of this census was to draft the list of all socially and economically backward masses of the country which could be used as a basis to categorize the list of beneficiaries under the PMAY – G plan.
If the applicant’s name is mentioned in the list released by the Gram Sabha, then he/she is eligible for the scheme. Once the name is listed, the right applicant will get the benefits of this housing scheme automatically on their turn under PMAY – G. The detailed procedure for the identification and selection of beneficiaries is elaborated upon in the Framework for Implementation (FFI) of PMAY-G.
Fund Allocation & Size
PMAY -U: The mission seeks to address the housing requirement of the urban poor as well as slum dwellers. In order to understand the classification of a slum better – it is defined as a compact area housing a minimum of 300 people or about 60 – 70 families in unsanitary, congested lodging.
- Implemented with a strong belief in the fact that land is a valuable resource, PMAY-U partners with private sector players to bring about a complete redevelopment of slums. On average, a slum rehabilitation grant of INR 1L per house is provided.
- To increase the availability of houses belonging to the EWS (Economically Weaker Sections) category at an affordable rate, states, and Union Territories, either through agencies or in partnership with the private sector including industries, have planned affordable housing projects. The Central Government provides a grant of up to INR 1.5L per EWS house.
- Through the Credit Linked Subsidy Scheme, beneficiaries of EWS and Low Income Groups (LIG) can seek housing loans from banks, non-banking financial institutions, and other lending institutions for new construction and renovation of existing dwellings as incremental housing. The subsidy will be available only for loan amounts up to INR 6L. Beneficiaries may also qualify for a 6.5% interest subsidy for a tenure of 20 years or during the tenure of the loan – whichever is lower.
PMAY-G: It covers approximately one crore households that are currently in a kutcha state. If declared eligible, the beneficiaries receive unit assistance of INR1.2L for houses in the plains and INR 1.3L for houses located in difficult to access areas. The minimum size of the house constructed under Pradhan Mantri Awas Yojana (Gramin) is 25 sq.m. It also extends financial assistance to those who are residing Below Poverty Line (BPL) in order to help them build these houses.
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Process of Applying
There are distinctions based on application processes as well. The Ministry of Housing and Urban Development has set up a simple process in which the PMAY-U beneficiary can go to Common Service Centers (CSC) located in the area. An in-depth application process can be studied on its official website.
For PMAY-G, every beneficiary is selected on the basis of data sourced from SECC (2011). If they are listed in the SECC, they may reap the benefits. Those looking to procure benefits through PMAY-G and who qualify for the same, can head to the official website and fill in the requisite details.
Conclusion: The PMAY-G and PMAY-U schemes have proved exceptionally useful for both the rural and urban populations of India. However, not everyone may be able to meet the strict eligibility criteria or find the provisions sufficient. In such cases, one can apply for a Bajaj Finserv Home Loan on Finserv MARKETS. The Bajaj Finserv Home Loan offers high loan amounts of up to Rs. 3.5 crores, inclusive eligibility criteria, flexible repayment tenures up to 300 months, competitive interest rates and more. If you’re looking to purchase a brand new home of your own, the Bajaj Finserv Home Loan on Finserv MARKETS is the one to beat.
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