The Pradhan Mantri Awas Yojna (PMAY) is an urban housing scheme of the Government of India. The scheme aims to facilitate rural to urban transition for households which had previously been living in unsanitary living conditions due to financial constraints. Launched in the first Prime Ministerial tenure of Shri Narendra Modi, this scheme is a grass root initiative by the Ministry of Housing and Urban Affairs which was inaugurated in mid-2015.
The scheme aims to provide affordable and ecologically-friendly housing to all weaker sections of the society by 2022.
Eligibility to Avail of PMAY
The PMAY scheme is open to be availed of by any household which falls under the following criteria. The household should be classified as under one of the following by the government:
(a) EWS (Economic Weaker Section) with a family income of up to Rs.3 lakh per annum, (b) LIG (Lower Income Group) with a family income of up to Rs.6 lakh,
(c) Middle Income Group (MIG-I) with a family income range of Rs.6 lakh to Rs.12 lakh per annum,
(d) Middle Income Group (MIG-II), with a family income range of Rs.12 lakh to Rs.18 lakh per annum.
In addition to this, the family and its members should not be holding a pucca (cement/brick) house in their names, in any part of the Indian Union. The PMAY cannot be availed of for a home that has been constructed or is under construction at the time of application. The scheme delineates preferential allotment of houses on the ground floor to the elderly and/or people with disabilities. Any beneficiary of a state/central government housing plan, who is in possession of a pucca house, is automatically ineligible for the scheme. It is pertinent to note that the income of the spouse is also added to the “household” income when being considered for this scheme.
The PMAY List
The PMAY List comprises of the applicants selected for PMAY in a given year. The list comprises of two sections: the Pradhan Mantri Awas Yojana Urban (PMAY – U) and the Pradhan Mantri Awas Yojana Rural or Gramin (PMAY R/G). The list for 2021 has already been published on the PMAY website.
The PMAY Subsidy
In addition to constructing new homes, PMAY also has a scheme for existing home owners who wish to improve and renovate their accommodation. The credit-linked subsidy scheme (CLSS) of the PMAY was created to provide a subsidy on the rate of interest of loans availed of for buying or constructing or extending or improving housing.
The EWS and LIG households are eligible to receive an interest subsidy of 6.5% if the carpet area of the house is up to 60 square meters. The maximum loan amount under this scheme is Rs.6 lakh.
For MIG-I households, the maximum interest subsidy is up to 4% for a house with a carpet area of up to 160 square meters. The maximum loan amount is Rs. 9 lakh to be paid back over 20 years. For MIG-II households, the maximum interest subsidy is 3%, for a house with a carpet area of up to 200 square meters. The maximum loan amount for this scheme is Rs.12 lakh to be paid back over a period of 20 years.
Benefits of PMAY
PMAY provides a relatively easy way of home ownership and home improvement. The CLSS aids in providing subsidies on the interest component, thus reducing the total financial liability on the customer (the rates of interest subsidy being linked to the total annual income of the beneficiary and the size of the accommodation being financed).
Other Important Considerations of the PMAY Scheme
The area eligibility for constructing houses under the PMAY scheme includes all statutory towns and towns notified after the census of 2011. Areas not notified as above, cannot be used to construct housing under the PMAY. It is also pertinent to note that the construction and/or extension project, for which the loan has been taken, should be completed within 3 years from the date of receiving the first instalment of the loan.
The PMAY is a government of India initiative to facilitate cheap and affordable ownership of homes, in urban areas, to people from financially disadvantaged groups. The scheme broadly classifies households into 4 primary divisions based on their total annual income. The PMAY benefits and facilities provided are dependent on the total income of the household. In addition to construction, the scheme also provides an opportunity for existing home owners to extend and renovate their houses. People with disability and beneficiaries over the age of 70 are preferentially allotted ground floor accommodation. The constructions of houses under PMAY are necessarily required to use eco-friendly and sustainable technology.