Pradhan Mantri Awas Yojana - The Beginning of New Living

by Anamika Verma Advisor
  • PMAY scheme have empowered citizens to buy their own home

  • Home Loans on subsidized rates for low income group

  • Citizens are entitled for affordable and well-constructed houses

  • Boost to the lending and construction sectors

The increasing rate of urbanization in India has fueled demand in the housing sector. This high demand has also led to the growth of the real estate industry with soaring prices of housing properties. The sky-rocketing value and inflated interest rates on Home Loans have meant that the desire of owning a house for lower and middle income group remains out of reach.

However, the scenario has begun to change with the introduction of Pradhan Mantri Awas Yojana (PMAY) in 2015. With an aim to provide ‘Housing for All’ by 2022, PMAY is being billed as the ticket to affordable housing.

What is PMAY?

A brainchild of the present government of India, PM Awas Yojana was envisaged in 2015 with a promise to provide affordable housing to the urban and rural poor. The initiative rides on the policy of trying to accommodate lower and middle income group wherein a family doesn’t have to spend more than 30% of their disposable income to reside.

The government has extended the Credit Linked Subsidy Scheme (CLSS) on Home Loans for properties belonging to the Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG) 1 and 2. This quantum of loans with subsidized Housing Loan interest can also be used for purchase, construction or improvement of the house.

Salient Features of PMAY

  • Under the PMAY scheme, a subsidy of 6.5% on Home Loan interest rate is available to those in the EWS (annual income below Rs.3 lakh) and LIG category with annual income not exceeding Rs.6 lakh. They can avail a Home Loan of up to Rs.6 lakh with subsidized interest rates for a tenor of 15 years.

  • Those belonging to MIG 1 segment with annual income of Rs.6-12 lakh can avail a Home Loan of up to Rs.9 lakh with an interest subsidy of 4%. However, one should be a first time buyer of the house and the ownership has to be in the name of a woman or jointly with her husband to avail the scheme.

  • For MIG 2 segment, those with annual income of Rs.12-18 lakh can avail a Home Loan of up to Rs.12 lakh with an interest rate subsidy of 3% under the PMAY scheme. It needs to be noted that the carpet area of the house must not exceed 200 sq. metres to avail these benefits.

  • The administration will build affordable houses in selected cities using eco-friendly construction methods to help the urban population of India. It is projected to be done in three phases by covering entire urban areas in the country which includes 4041 statutory towns with priority being given to 500 Class I cities.

  • Differently-abled and the senior citizens will be given preference in allocation of ground floor flats. As per government reports, 36 lakh houses have been sanctioned under the PMAY since the launch of the scheme, while more than 4 lakh houses have been constructed till date.

Apart from providing well-constructed and affordable housing, the PMAY scheme is also beneficial to those looking for loans to construct or renovate their house. This has further galvanized the housing sector to improve the lifestyle of urban population by availing institutional funding with affordable interest rates.

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About Anamika Verma Advanced   Advisor

40 connections, 1 recommendations, 102 honor points.
Joined APSense since, August 12th, 2016, From Delhi, India.

Created on Oct 1st 2018 01:22. Viewed 573 times.


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