The much-discussed Pradhan Mantri Awas Yojana (PMAY) is an ambitious programme that aspires to provide homes for every person in the country. Some websites provide an in-depth look at the government’s flagship housing project as well as the incentives that will be available to residents under the scheme.
The vision of Prime Minister Narendra Modi to provide affordable housing for all through affordable and achievable PMAY Eligibility not only provided hope to those who had shied away from investing in the real estate sector because of high costs but also sparked optimism among builders and developers who had shied away from investing in the sector because of high costs.
The PMAY was launched on June 1, 2015, with the goal of providing pucca affordable housing choices to the urban and rural poor. It included a wide range of developer incentives designed to help them overcome their financial difficulties in order to expedite the effective building of low-cost homes. The plan was designed to aid the efficient development of low-cost dwellings.
The ambitious project of PMAY involves a number of plans and solutions that will benefit all of the parties participating in it. Continue reading to learn about the important aspects of the programme and how it will benefit home buyers as well as the real estate industry as a whole.
What is the purpose of PMAY?
Both PMAY as well as criterion for PMAY Eligibility are under a Central Government initiative that aims to provide affordable housing choices for people from Lower Income Groups (LIG) and Economically Weaker Sections (EWS).
After initially being implemented for only Low Income Group (LIG) and Economically Weaker Section (EWS) homebuyers under PMAY Eligibility, the programme has now been expanded to include consumers from the Middle Income Group (MIG). On the expansion of PMAY, Rohit Poddar, MD of Poddar Housing and Development Ltd, believes that it is feasible to incorporate MIG within the scope of this programme because affordable housing in Tier II and Tier III cities is not limited to 30 sq m units but may also include larger 2BHK units. Consequently, the government’s decision to increase the size of the rooms to 90 sq m and 110 sq m was well-thought-out and necessary in its execution.
As part of an effort to expedite completion, the massive project has been separated into two parts: PMAY-Urban and PMAY-Gramin, respectively.
The focus of PMAY-Urban is on congested slums, where temporary housing units will be replaced with pucca or permanent residences, which will be supplied to slum residents and other groups from the LIG, EWS, and MIG segments, among others.
PMAY-Grain is a programme that is available in rural areas. Renters and homeowners who own a home that will be constructed can apply for this scheme, which is known as the Credit Linked Subsidy Scheme (CLSS)
Essentially, there are two main characteristics of the PMAY system – First and foremost, it will provide inexpensive permanent housing to members of the LIG, EWS, and MIG segments. Second, it has implemented the Credit Linked Subsidy Scheme (CLSS), which provides subsidies on loans taken out for the building, extension, and improvement of existing dwellings.
Criteria for participation in CLSS
There should not be any pucca houses in the name of the beneficiary or in the name of any member of his/her family in any area of India where the beneficiary lives.
In the case of a married couple, either one of the spouses or both of them will be eligible for a single subsidy based on their joint ownership.
The beneficiary should not have previously received central help from the government under any housing programme or received any benefit under the PMAY programme.
What is the significance of PMAY?
While the quarterly report cards of popular metro areas show a significant overhang in inventory, the country as a whole suffers from a lack of 20 million housing units, which is being addressed through the PMAY initiative and by broadening eligibility criteria under PMAY Eligibility.
With traditional project approval processes in place, it did not make much economical and financial sense for established developers to build affordable housing because the capital carrying costs remained prohibitively high. Furthermore, there were no incentives for any of the stakeholders throughout the entire chain, resulting in far lower margins than planned. It has only been in the last 1-2 years that such enabler policies have been put in place to encourage developers to create new products. The provision of infrastructure status to the affordable housing sector in the Budget 2017-18 has also been hailed as a positive step that will assist developers in increasing their credit off-take and gaining easier access to lower-cost institutional financing. Overall, greater contributions from foreign direct investment (FDI), insurance funds, and expanded participation by private actors are expected to propel the affordable housing segment into a sustainable growth trajectory.
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Important information – The beneficiary family will consist of the wife, the husband, and any unmarried children who are still living at home. (In the MIG category, an adult who is an earning member, regardless of whether or not the household is married, can be classified as a separate household.)
A woman’s ownership is not necessary for a loan taken out for the construction or enlargement of a home. -MIG-1 and 2 loans must be granted on or after January 1, 2017.
Six metros should have affordable residential property costs of less than Rs 65 lakh, while non-metro areas should have costs of less than Rs 50 lakh.
Plenty of challenges
The single-window clearance issue continues to be the most difficult obstacle for developers and builders to overcome, even for people and properties that are eligible for PMAY Eligibility. Obtaining multiple approvals at various phases of development causes not only project delays but also increases the overall cost of construction. Furthermore, because the land is a limited resource, it serves as a significant deterrent. While the government is considering the possibility of releasing land parcels under its jurisdiction, there are still certain political and environmental obstacles to be overcome.