Useful Effect of Pradhan Mantri Awas Yojana (PMAY) Scheme
The Pradhan Mantri Awas Yojana plan was created to provide “affordable housing” through the credit-linked PMAY subsidy on house loans to individuals from economically disadvantaged as well as low- and middle-income groups. The plan is funded by both the government and the business sector.
The PMAY scheme is divided into two parts: PMAY Urban and PMAY Rural, and each half have its own set of perks and features designed with the target demographic in mind. For example, PMAY Rural is aimed primarily at those living in rural regions, whereas PMAY Urban targets those living in cities.
The Effect of Pradhan Mantri Awas Yojana (PMAY) Scheme
The second half of 2017 saw a significant increase in investments in the affordable housing sector. This was caused by a rise in housing demand, as well as the government’s drive for the housing project. Private equity real estate businesses have made significant investments in the affordable housing category.
The vast majority of housing developments that were launched in 2017 were in the inexpensive and mid-range price ranges. In fact, the affordable sector accounted for more than 40% of all residential projects.
Given that the Union Budget recently provided the affordable housing market and the PMAY a considerable boost, the number of private equity investments is predicted to rise.
Further, the Indian real estate industry registered a significant decline as a result of demonetisation, the Goods and Services Tax (GST) and the Real Estate (Regulation and Development) Act, 2016, as well as due to the effect of COVID, the PMAY scheme has played a key role in the growth of the real estate sector in the recent past.
Establishment of India’s Real Estate Regulatory Authority (RERA)
One of the key elements of the Real Estate (Regulation and Development) Act, 2016, was to safeguard purchasers’ rights and build transparency between developers and builders and buyers. RERA also provides a venue for speedy grievance resolution if the property in question is not delivered on time or if there is another issue. Currently, all states have implemented RERA. Furthermore, the timing couldn’t have been better since residential developments in the affordable housing category have witnessed significant growth as a result of the Pradhan Mantri Awas Yojana.
Components of the PMAY Scheme
Creating a housing policy for a country with a population of more than 1.1 billion people is no simple task. The logistics of such a programme should be designed in such a way that no segment of society is excluded. This is one of the many purposes why the PMAY’s architects targeted the country’s urban poor, i.e. persons from the Economically Weaker Sections (EWS), Middle Income Groups (MIG) (MIG), and Lower Income Groups (LIG).
The PMAY scheme has been further subdivided into four components, which are listed below. Needless to say, these components cover all of the various circumstances in which prospective homeowners may find themselves.
Slum Rehabilitation on the Ground
This component is intended for residents who live in slums. They can choose this component to get a government grant of Rs.1 lakh for the construction of an all-weather residence.
Beneficiary-Led Development
This mission component intends to provide support to EWS-eligible households that want to build a new house or improve an existing one. However, the beneficiary must possess the land for this to be satisfied. Under this component of the PMAY scheme, the beneficiary would receive Rs.1.5 lakh in government support for housing building or improvement.
Partnership for Affordable Housing
Under this component, a recipient can get central assistance of Rs.1.5 lakh for building a new house if he or she does not own land or a house. This financial aid is offered to residences being developed in collaboration with the assistance of states/union territories.
Credit-Linked Subsidy Program
This plan is intended for residents who can afford to build/purchase/improve a home with the aid of a home loan. If the eligibility conditions are satisfied, a PMAY subsidy is offered on the interest component of the home loan EMI. The maximum PMAY subsidy available is Rs.2.67 lakh and the subsidy can be availed of by applying for a home loan with any of the major banks.
Summing Up
The PMAY initiative’s primary purpose is to minimise homelessness by providing affordable housing. Through the PM Awas Yojana, the government wants to ensure no one is homeless. However, one must provide necessary papers and documents, such as a photograph of passport size, each family member’s voter identification number (Aadhaar), caste certificate, etc. to enjoy the benefits associated with this scheme. Therefore, applicants must keep these documents ready before applying.