Johann Wolfgang von Goethe had said, “He is the happiest, be he king or peasant, who finds peace in his home.” Home is where our heart is. Everyone deserves to live in their own house. Sadly, many can’t afford to have it. Fortunately, the Government of India has launched a novel scheme Pradhan Mantri Awas Yojana, to ensure housing for all. We thus discuss its salient features in this analysis. Read on!
What is Pradhan Mantri Awas Yojana?
Pradhan Mantri Awas Yojana was subsequently launched by the Ministry of Housing and Urban Poverty Alleviation (MoHUPA), Government of India in 2015 to provide affordable housing to urban and rural poor. Moreover, this scheme has two parts, namely, Pradhan Mantri Awas Yojana(Urban) and Pradhan Mantri Awas Yojana (Rural).
Pradhan Mantri Awas Yojana(U) is for the urban poor and also includes slum dwellers. Also, the main components of this program are,
- Firstly, in-situ and ex-situ rehabilitation of slum dwellers in co-ordination with private developers.
- Secondly, credit-linked subsidy to the poor to access affordable housing.
- Thirdly, providing affordable housing in partnership with private developers.
- Lastly, subsidy for individuals for the construction of their house.
Moreover, it is a Centrally-sponsored scheme while the credit-linked subsidy component is a part of the Central sector scheme. Also, a Central sector scheme has 100% funding by the central government, implementation is done by the central agencies and the theme is selected as per the Union list. In contrast, a Centrally-sponsored scheme is jointly undertaken by the Central and State governments, implementation is done by the state agencies and the theme is as per the State list. The cost is thus shared by the Centre and States in the ratio 50:50, 70:30, 75:25, or 90:10, as per mutual agreements. Significantly, the scheme also has provisions for members from the transgender community, widows, senior citizens, and the differently-abled.
Also, the government has recently extended the Credit Linked Subsidy Scheme (CLSS) till March 31, 2021. Subsequently, as per the government estimates, over 2.5 lakh middle-income families will be benefited from this scheme during 2020-21. It is thus a scheme moving in full flow as of now and individuals from the notified income brackets can avail of the benefits.
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Pradhan Mantri Awas Yojana eligibility criteria
Above all, the beneficiaries of the Pradhan Mantri Awas Yojana include low-income groups (LIGs), Middle Income Groups (MIGs), and Economically Weaker Section (EWS).
|Group||Annual income cap|
|EWS (Economically Weaker Sections)||up to Rs 3 lakh|
|LIG (Lower Income Group)||Rs 3 lakh to 6 lakh|
|MIG (Middle Income Group)||Rs 6 to Rs 18 lakh|
Above all, the EWS individuals will get assistance in all 4 verticals of the scheme. In contrast, LIG and MIG beneficiaries will get assistance only in the Credit-linked subsidy component.
Furthermore, the identification process is streamlined and self-certification or affidavit submitted at the time of loan application. In addition to this, the beneficiary should not own a pucca house either in his name or under the name of any other family member.
PMAY-U covers 4041 statutory towns according to census 2011. It also has focused on 500 class I cities. Moreover, it is subsequently being implemented in 3 phases, namely,
|Phase 1||April 2015 – March 2017||Covered 100 cities|
|Phase 2||April 2017 – March 2019||Covered 200 cities|
|Phase 3||April 2019 – March 2022||To cover all the remaining cities|
How to apply for PMAY Scheme?
To thus apply for the PMAY scheme online, individuals should follow the steps below henceforth :
1: Go to the PMAY official website at https://pmaymis.gov.in/.
2: Under the ‘Citizen Assessment’ menu, choose the ‘Benefits under other 3 components’ option.
3: Enter your ‘Aadhaar’ or ‘Virtual ID’ and ‘Name as per Aadhaar’
4: You will now be redirected to a new page where you will have to fill the PMAY application form online.
5: Click on the Disclaimer checkbox option, fill in the Captcha, and click on the ‘Save’ button.
Documents required for PMAY
- PAN Card (mandatory) and any one of the below documents,
- Voter Card
- Aadhar Card
- Valid Passport
- Valid Driving License
- Photo Credit Card
- Photo Identity card issued by Govt. body
- Letter from a recognized public authority or public servant verifying the identity of
- The customer's photograph (which is not more than 30 days old).
- Voter Card
- Aadhar Card
- Valid Passport
- Letter from a recognized public authority or public servant verifying the identity and
- residence of the customer
- Latest Utility bill
- Rent agreement on stamp Paper
- Bank Statements reflecting the address of borrowers of any commercial nationalized
- Life Insurance Policy
- Residence address Certificate/letter by the employer on company letterhead
- Copy of Sale Deed of the property (residence), if owned
Proof of income:
- Last 2 months salary slip of the individual
- Last 6 months bank statement of salaried account of the individual
- Latest Form 16 / ITR of the individual
- Complete chain documents of the property (as applicable)
- Agreement to Sell (if executed)
- Allotment Letter / Buyer Agreement(if applicable)
- Receipt/(s) of payment/(s) made to the developer (if applicable)
Benefits of Pradhan Mantri Awas Yojana
1. Huge subsidy for a longer tenure: Consequently, the beneficiaries get an interest rate subsidy of up to 6.5% on housing loans with a tenure of 20 years.
2. Interest rate subsidy is as per income slabs,
|Up to 6 lakh |
|Credit-linked subsidy of 6.5% for an amount up to Rs 6 lakh.|
|Up to 12 lakh per annum||4% interest subsidy on a loan amount of Rs 9 lakh.|
|Up to 18 lakh per annum||3% subsidy on a loan amount of Rs 12 lakh.|
3. Convenience: Differently-abled (Divyang) and Senior Citizens will subsequently get a preferential allotment of a house on the ground floor under PMAY.
4. Nature-friendly: Eco-friendly and sustainable technologies are thus used for the construction of houses under PMAY. Also, this is in line with the government's commitment to sustainable development goals.
5. Secures the financial future of women: The PMAY scheme has thus made it compulsory for a married man to register his wife as a co-applicant of the scheme. This is regardless of the role she has in the purchase of the house. It will consequently empower her financially in the future.
6. Promotes housing for all sections of society: Moreover, the PMAY scheme has special provisions for the most marginalized sections of our society like the SC/ST/Women/Elderly. It has therefore been kept in mind to provide them social justice and equal opportunity to have a better future.
7. Focuses on Slum rehabilitation: Improvement in the standard of life for every citizen is thus at the heart of the scheme. It subsequently aims to provide rehabilitation to slum dwellers, giving them an option to opt for a pucca or concrete house. It will thus reduce the burden on the big cities and also salvage the falling land value owing to slum settlements.
Beneficiaries can also avail of tax benefits under various sections of the Income Tax Act, 1961 as per the tax regime of FY 2019-20. Also, the tax benefits are as below,
|Exemption of up to Rs 1.50 Lakh per annum on Home loan principal repayment.|
|Exemption of up to Rs 2 lakh on Home loan interest repayment.|
|1st-time home-buyers can avail of benefits of up to Rs 50,000 yearly.|
|Exemptions of up to Rs 1.50 lakh if your property qualifies under affordable housing.|
Having our house is a dream for many individuals. Often due to a lack of financial support, people are not able to buy a house. Forced to be shelter-less, they go from pillar to post in search of a house. The government of India launched the Pradhan Mantri Awas Yojana in 2015 to address this problem.
It is focused on the Economically Weaker Sections, Lower Income Groups, and Middle Income Groups with a special emphasis on women, differently-abled, Senior Citizens, SC, and ST. Consequently, the government provides a credit-linked subsidy to individuals from these categories so that they can avail the benefit of this scheme. Furthermore, the scheme has a target of 2022 to achieve housing for all.
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