The Pradhanmantri Aavas Yojna (PMAY) is a Credit Linked Subsidy Scheme (CLSS) introduced by the Central Government. The scheme was announced by Prime Minister Shri Narendra Modi. PMAY envisages the vision of housing for all by the 31st March 2022 on the 150th birth anniversary of Mahatma Gandhi. Under this scheme, interest subsidy on purchase/ construction / extension / improvement of house will be provided to customers belonging to Economical Weaker Section (EWS)/Lower Income Group (LIG)/Middle Income Group (MIG).
Pradhanmantri Awas Yojana, PMAY scheme was launched to boost the affordability of houses against an inflated real estate sector. The scheme aims to 20 million houses across the nation.
Who are the Beneficiaries?
In addition to the above, beneficiaries can avail the benefits of this scheme by meeting the following few eligibility criteria –
PMAY – Features
For Middle Income Group (MIG), the interest subsidy will be provided on housing loans for acquisition/construction of houses (including repurchase).
For Economically Weaker Section (EWS)/Lower Income Group (LIG), the interest subsidy will be provided on housing loans for acquisition, construction of house. The Credit Linked subsidy would also be available for home loan availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The interest subsidy benefit will be upfront on the principal outstanding.
Based on the areas that it caters to PMAY has two parts – Urban and Gramin.
1. Pradhan Mantri Awas Yojana Urban (PMAY-U)
PMAY-U includes urban development authority, special area development authority, industrial development authority, development area, notified planning, and every other authority which is responsible for urban planning and regulations.
2. Pradhan Mantri Awas Yojana Gramin (PMAY-G)
The Pradhan Mantri Awas Yojana Gramin (PMAY-G) was formerly called the Indira Awas Yojana and was renamed in March 2016. It is targeted at promoting accessibility and affordability of housing for all of rural India with the exceptions of Delhi and Chandigarh.
The aim is to provide financial assistance to the homeless and those residing in decrepit houses and assist them in the construction of pucca houses. Beneficiaries living in plains can receive up to Rs. 1.2 Lakh and those in North-Eastern, hilly areas, Integrated Action Plan (IAP), and difficult areas can avail up to Rs. 1.3 Lakh owing to this housing endeavour.
This cost of housing development will be shared between the Central and State Government in the following ways:
64:40 for plain regions.
90:10 for North-Eastern and hilly areas.
Components of the Pradhanmantri Awas Yojana
There are four primary features of this scheme:
The CLSS provides subsidies on home loan interest rates to those eligible for this scheme. Home loans under the CLSS have a maximum tenor of 20 years. NPV or the net present value is evaluated at a discounted rate of 9% of the interest subsidy.
The scheme aims to rehabilitate slums using land as a resource, in association with private organizations to provide houses for families living in such areas. The Central Government determines the prices of the houses, and the beneficiary contribution (if any) is decided by the respective state or UT.
Affordable Housing in Partnership (AHP) provides financial assistance to the tune of Rs. 1.5 lakh on behalf of the Central Government to EWS families for the purchase of houses. State and UTs can partner with their agencies or private sector to develop such housing projects.
This component of PMAY targets EWS families who cannot avail the benefits of the previous three components. Such beneficiaries will avail financial assistance from the Central Government of up to Rs. 1.5 Lakh that can be used to fund the construction of a house or enhancing an existing one.
How to Apply for PMAY
Beneficiaries can apply for PMAY through the following:
Individuals can visit the official website of the scheme to apply online. They need to have a valid Aadhaar Card to apply.
Beneficiaries can apply for the scheme offline by filling up a form available through Common Service Centre (CSC).
The PMAY benefits can be availed if you wish to acquire a new house from the developer or the builder and also for buying a house on resale. It is a well thought-out scheme that benefits the nation and the economy. For the urban areas this scheme will surely assist in eradicating slum houses and replace those with concrete houses.
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