The Pradhan Mantri Awas Yojana (PMAY) is a flagship program undertaken by the Government of India in the year 2015. The program aims to build over 20 million houses across the country for people belonging to the economically weaker section of the country. With the PMAY scheme, the government aims to improve the standard of living of people, especially those who live in make-shift or ‘kaccha’ houses in rural areas or in crowded slum dwellings in urban cities. To ensure that this goal is achieved, the PMAY scheme is broadly classified into two components-
Under the PMAY scheme, the government is offering a subsidy of nearly 6.5% on the home loan interest rates. This move is taken to encourage a large number of families to avail a home loan facility from the government and build a ‘pucca’ or permanent houses for themselves.
To ensure that the benefit of the scheme reaches the eligible families, the government has classified the following income criteria for availing the PMAY scheme-
Individuals belonging to the Economically Weaker Section (EWS)- Annual income up to INR.3 lakh
Individuals belonging to the Lower Income Group (LIG)- Annual Income up to INR.6 lakh
Individuals belonging to the Middle Income Group (MIG)- This section is classified into 2 sub-groups- MIG 1 (Annual Income up to INR.12 lakh) and MIG 2 (Annual Income up to INR.18 lakh)
As per the latest government reports, Madhya Pradesh, Gujarat, Maharashtra, Tamil Nadu, and West Bengal are the top 5 states with the highest number of affordable houses.
Budget Allocation and PMAY Status for Each region
The PMAY-U has 4 key verticals:
Slum Rehabilitation in cities
Promoting affordable housing through credit linked subsidy scheme
Affordable housing through a partnership with public and private investors
Home loan subsidy for beneficiary-led home enhancement/construction
Under the PMAY-U, the government has allocated a budget of INR. 18,203 crore to be utilized across 523 cities. As per reports, the Ministry of Housing and Urban Affair has already approved the construction of 3,21, 567 affordable houses under the PMAY-U. The project is already in its third phase. The first phase, completed in March 2017, covered over 100 cities across major states and Union Territories. The second phase, which ended in March 2019, covered an additional 200 cities whereas the current, third and the last phase is expected to cover the remaining cities across India by the end of March 2022.
The PMAY G is a restructured form of the 1985 ‘Indira Awas Yojana’ by the current government. A majority of the rural population in India falls under the BPL (below poverty line). A lot of these BPL families do not have a ‘pucca’ home for themselves and have to struggle for basic amenities on a daily basis. The government wants to change this scenario by the year 2022 under the PMAY-G. Thus, along with the home loan subsidy, the government also aims to upgrade the overall quality of living of these BPL families in village areas with other PMAY linked schemes such as Ujjawala Yojana, Saubhagya Yojana, Swacch Bharat Yojana, etc. An approximate INR. 21,000 crore was directed towards PMAY-G in FY 2018-19. States like Madhya Pradesh, Orissa, Uttar Pradesh, and West Bengal accounted for nearly 56% of the total funds released. The utilization was low in Punjab (39%) and Kerala (15%) in FY 2018-19. The decision to allocate the number of funds to a particular State is based on the following-
75% weightage of rural housing
25% poverty ration weightage
To ensure a fair allocation of these funds, the government launched ‘AWAAS Soft’, a software that can help improve the overall administration of the PMAY-G.
Overall Construction Status
To assess the demand for affordable housing under PMAY-U and PMAY-G, several State Governments in India have started undertaking demand surveys. As per the latest reports, Kerala, West Bengal, Jharkhand, and Orissa are among the top states in India that have achieved 40%-43% of the affordable housing target in both urban and rural areas. For the highest number of affordable houses under construction, the State of Gujrat currently leads in India, closely followed by the southern states of Telangana and Tamil Nadu. Although a higher number of affordable houses were granted to States of Andhra Pradesh, Uttar Pradesh, and Maharashtra, these States have lagged behind in the execution for constructing these houses.
The government is making intense efforts to provide affordable housing to a majority of the population in India. Availing the benefits of PMAY-U and PMAY-G are sure to uplift the standard of living of people who are struggling for getting a permanent roof on their heads. Another advantage of building a home under the PMAY scheme is that the material used for constructing these houses would be eco-friendly. The use of such eco-friendly construction materials significantly reduce the maintenance cost of the house and provides an overall positive impact on the way of living. Moreover, the PMAY subsidy also provides other financial benefits to the applicant, such as tax rebates and low EMI on home loans. If an applicant wants to check how much saving he/she can make on his/her home loans under PMAY, he/she can make use of online home loan calculator.
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