SYNOPSIS

Urban housing shortage is estimated to be 18.78 million units according to Government figures.
The Government unveiled the Pradhan Mantri Awas Yojana in June 2015 to realize the target of ‘housing for all’.
The PMAY (Urban) mission looks at in-situ rehabilitation of slum dwellers by involving the private sector in the development.
The PMAY (Gramin) mission aims to provide proper houses to all homeless and also those living in dilapidated houses in rural areas.
PMAY Urban and Rural can help provide affordable housing and alleviate the housing gap in India.

India’s population is often discussed from the perspective of its size; that the country’s large population provides immense business opportunities. Also, about its demographic advantage stemming from the fact that nearly half its population is young. Apart from creating their own income and expenditure, this large young population will start their own families. This, in turn, means a large demand for housing. Urban housing shortage based on the Census of India, 2011, stands at 18.78 million units1. Increasing income levels of Indians and migration towards cities are the other factors that are likely to aid the housing demand.

The Government is hence, providing all the support it can to promote affordable housing. The Government’s initiative will have a two-pronged benefit – first, it is expected to provide shelter to every Indian; second, it has economic potential resulting from the mass construction of homes. It would lead to additional employment, consumption of materials, etc. and this creates a chain of economic activity. Thus ‘housing for all’ is a multi-dimensional ambition of the Government which is providing various incentives and schemes to realize this ambition.

In this backdrop, the Government unveiled the Pradhan Mantri Awas Yojana in June 2015 to realize the target of ‘housing for all’. It aims to provide affordable housing to all by the year 2022².

There Are Two Components To The Prime Minister’s Housing Scheme PMAY:

1. PMAY (URBAN)

This mission looks at providing housing for all in the urban cities thru various steps. These are a) In-situ rehabilitation of slum dwellers, b) Affordable housing by involving the private sector in the development, c) Credit Linked Subsidy Scheme (CLSS) d) Beneficiary led individual house construction. All statutory towns as per census 2011 and others, if notified, would be eligible for the scheme benefits. The scheme promises a Credit Linked Subsidy Scheme (CLSS) for purchase and construction thru a loan from lender. Beneficiaries belonging to the economically weaker and low income group sections as well middle income group (MIG) can avail interest subsidy on home loans (from banks and financial institutions) for loan amounts up to Rs. 6 lakh3. This interest subsidy is available for home loan of up to Rs. 9 Lakh for MIG I and Rs.12 lakh under the CLSS for MIG II segment. In other words, if an eligible individual takes a home loan of Rs. 13 lakh, he will get subsidy on interest payable on loan of up to Rs. 12 lakh, while he will have to pay interest at the prevailing rate for the balance loan of Rs.1 lakh. The assistance would be provided through the urban local bodies and other implementing agencies of the States and Union Territories.

2. PMAY (GRAMIN)

This mission aims to provide proper houses to all homeless and also those living in dilapidated houses. The scheme is being implemented in rural areas all over India (except Delhi and Chandigarh)5. Government assistance to the tune of Rs.1.20 lakh (Rs.1.30 lakh in hilly areas) is provided to the identified beneficiaries selected through an objective and transparent mechanism involving the gram sabha based on the Socio-Economic and Caste Census (SECC). The beneficiary can avail 90 days of unskilled labour under MGNREGA scheme and also an optional loan of up to Rs. 70,000 for construction of a home⁶.

The Prime Minister’s housing scheme - PMAY Urban and Rural - can help provide affordable housing and alleviate the housing gap in India. These schemes also rope in the private sector financial institutions, which can play a positive role in nation building. The resultant economic activity of PMAY can trigger a strong wave of business activity resulting in higher incomes for Indians.