Pradhan Mantri Awas Yojana (PMAY) – Housing for all by 2022

Launched on 25 June 2015, Pradhan Mantri Awas Yojana aims to cater the ever increasing demands of housing in urban areas. Under the scheme, also known as Housing for All by 2022 scheme, the Government will undertake construction of 20 million (2 Crore) homes on the urban areas of the country. Out of the 20 million homes, about 18 million will be developed to cater the needs of slum households which is increasing at a decadal growth rate of 34%. The rest 2 million homes will be provided to non-slum urban poor.

According to current estimates, the urban population of the country is about 414 million which is set to see a phenomenal growth in the coming years. By the year 2050, it is estimated to reach up to 814 million people, an increase of about 400 million from current levels. Providing affordable housing, sanitation, infrastructure, and a safe environment are the biggest challenges for the country’s well-wishers or we can say the Government. At present, the housing development in the cities are being led by the private real estate developers who decides the areas and the cost of the housing for the end consumers. This is the reason why the real estate prices have skyrocketed over the past couple of decades leaving the common man with only dreams of owning a house.

Scheme Details

Under the scheme, a central grant of Rs. 1 Lakh to 2.3 Lakh will be provided to the urban poor beneficiaries of the scheme. The grant will come as part of a 6.5% interest rate subsidy scheme for the lower income groups. This means that the LIG applicants who wanted to buy a home under the scheme may apply for a housing loan with interest subsidy of 6.5 percent for a tenure or term of up to 15 years. The total benefit received by this loan subsidy will add up to INR 1 to 2.3 lakh to each applicant. The subsidy will be a major relief for the home buyers as the currently housing loan interest rates are estimated at about 10.5 percent. The ‘Pradhan Mantri Awas Yojana (PMAY)’ scheme will replace all previous government housing schemes such as the Rajiv Awas Yojana.

The mission of providing 2 crore homes to urban poor is estimated to cost the central government about INR 3 lakh crore over the next 7 years, according to preliminary estimates. According to the news reports, the government took about one year to complete the operational guidelines of the scheme after rounds of negotiations with states and Union Territories.

PMAY is not the only scheme which will contribute to the development of housing in urban areas, there are other incentives and subsidies under which a grant of INR 1 lakh per beneficiary will be provided to the state governments for the development of housing projects in slum areas.

The government will also launch affordable rental housing scheme at a later stage. An INR 6,000 crore initiative, is meant to combat the proliferation of slums in urban regions. This was initially to be a part of the PMAY scheme but dropped for unknown reasons.

The benefit components

Over the years 2015-20122, the Urban Local Bodies (ULBs) and other implementing agencies through States/UTs will be provide central assistance for:

• In-situ Rehabilitation of existing slum dwellers using land as a resource through private participation.
• Credit Linked Subsidy.
• Affordable Housing in Partnership.
• Subsidy for beneficiary-led individual house construction/enhancement.

Out of the 4 components, Credit linked subsidy component will be implemented as a Central Sector Scheme while other three components will be implemented as Centrally Sponsored Scheme (CSS).

The entire urban area consisting of 4041 statutory towns will be covered under the scheme with initial focus on 500 Class I cities in three phases. Credit linked subsidy component of the scheme would be implemented across the country in all statutory towns right from the beginning.

1. Phase 1: Under the phase one, housing units will be created in the selected 100 cities in the period from April 2015 to March 2017.
2. Phase 2: The next phase will cover about 200 cities for housing development between April 2017 and March 2019.
3. Phase 3: The final phase of Pradhan Mantri Awas Yojana will be implemented in the remaining cities between April 2019 and March 2022.

The government will give flexibility to the state/UT governments to select the best component out of the four to accomplish the mission on time and meet the housing demands. The formulation and approvals of the housing projects under PMAY will be done by the state/UT governments itself in order to implement the scheme faster.

A technology sub-mission has also been incorporated with the PMAY which will work on creating building material, green technologies for modern and innovative housing structures. The sub-mission will also help the states/UTs in deploying the disaster resistant and environmental friendly technologies apart from facilitating the suitable layout designs and building plans.

How to Apply for Pradhan Mantri Awas Yojana

The state and UT governments will launch housing schemes under the PMAY and the applications will be floated for the interested applicants. For more information about the scheme, please visit http://mhupa.gov.in/User_Panel/UserView.aspx?TypeID=1434