‘Housing for All’ was a pie in the sky of the NDA Government. They envisioned and undertook some steps to make it possible by 2022. The Pradhan Mantri Awas Yojana (PMAY) has recently expanded its scope to cater to the housing needs of the mid-income group, besides the economically weaker sections (EWS) and low-income group. The Prime Minister has recently doubled the quantum of loan eligible for interest benefits under the Pradhan Mantri AWAS Yojna- PMAY in urban areas to Rs. 12 lakhs.
About the Scheme AWAS Yojana
Launched in the year 2015, under PMAY the government envisages building affordable pucca houses with water facility, sanitation, and electricity supply round-the-clock. The scheme was originally meant to cover those whose annual income was within 3 lakhs and those whose income was within 6 lakh rupees, but now it covers the mid-income group (MIG) as well.
Aspects of Pradhan Mantri Awas Yojana scheme comprises four key aspects:
- It aims to transform slum areas by building homes for slum dwellers in collaboration with
- It plans to give a credit-linked subsidy to weaker and mid-income sections on loans taken for
new construction or renovation of existing homes.
- The Government will chip in with financial assistance for affordable housing projects done in
partnership with States/ Union Territories for the EWS.
- It will extend direct financial assistance of Rs. 1.5 lakhs to EWS.
Importance of the Pradhan Mantri AWAS Yojna- PMAY Scheme:
While developers in India’s metropolitan cities are sitting on lakhs of unsold residences costing 50 lakhs onwards, the country is said to have a dearth of almost 20 million housing units essential for the rural and urban poor. The PMAY aims to address this gap. With the increase in subsidized loan amount to ₹12 lakhs, the scheme is looked up to cover a higher proportion of those in need of a shelter.
The PMAY will assuredly benefit the realty sector of India. For those in the lower and mid-income groups, the PMAY cuts the cost of acquiring a home by ₹1 lakh to ₹2.3 lakhs. The extension of the scheme to mid-income groups and upsurge in the loan amount to ₹12 lakh may make more homes within the reach of the urban poor. This scheme combined with a falling interest rate rule could mean upgraded loan growth for banks and NBFCs if you are an investor. Increasing demand for affordable housing not only improve the performance of banks and housing finance companies but also initiate growth of other allied businesses such as cement and steel.
One of the most important features of PMAY-G is the selection of beneficiary. PMAY-G selects beneficiary using housing scarcity parameters in the Socio-Economic and Caste Census (SECC) to guarantee that assistance is verifiable and genuine. The SECC data capture specific deprivation related to housing among households.
Under the Pradhan Mantri AWAS Yojna- PMAY, construction of houses is the sole responsibility of the beneficiary and appointment of contractors is strictly prohibited. The aim of the government is to replace all temporary or ‘kutchcha’ houses from Indian villages.