PMAY-Pradana Manthri Awas Yojana 2020 Housing Loan

PMAY- Housing for All by 2022 Scheme

 

The Government in the President's address in the Joint Session of Parliament in May 2014 had announced that "By the time the nation completes 75 years of its Independence (by 2022), every family will have a pucca house with water connection, toilet facilities, 24x7 electricity supply, and access".

In pursuit of this target, the Pradhan Mantri Awaas Yojana-Housing for all was launched by Prime Minister Mr. Narendra Modi on 1 June 2015. Under this scheme, affordable houses will be built in all cities and towns using eco-friendly construction methods for the benefit of the urban poor population in India.

The Pradhan Mantri Awaas Yojana (Gramin) was also launched, for the rural population, later on in pursuance to the goal of Housing for all by 2022.

According to the findings by Crisil, the central government has to mobilize Rs 1 lakh crore in the coming three years for achieving its target of building 1 crore houses under the Pradhan Mantri Awas Yojana – Urban (PMAY-U), being implemented by the ministry of housing and urban affairs.

  

Significance of the scheme:

  • PMAY-U does offer a huge opportunity to various sectors by setting off a virtuous cycle.
  • One crore houses would mean over Rs 2 lakh crore of home loans under PMAY and the exponential increase in consumption of 80-100 million tonnes of cement and 10-15 million tonnes of steel.
  • The construction estimate is of about four billion square feet over the life of PMAY-U. And all that would translate into 9-10 crore jobs over the execution of the mission mode scheme.

Why is it important?

  • The shelter is a basic necessity for Human survival.
  • We all need a house to ensure fundamental standards of living and to build a better civilization.
  • To own a house is still a dream for the majority of Indians due to financial hindrances. The scheme will provide financial assistance mainly to the poor.
  • The Housing sector is the engine of economic growth and a vital sector of the economy. The scheme is intended to give a boost to the housing sector.

Key facts:

  • The beneficiaries are the poor and the people living under EWS and LIG categories in the country.
  • The scheme is divided into three phases. In the first phase, a total of 100 cities will be covered from 2015 to 2017. In phase two, 200 cities will be covered from 2017 to 2019. In the third phase, the remaining cities will be covered from 2019 to 2022.
  • The government is providing an interest subsidy under PMAYof 6.5% on housing loans which can be availed by beneficiaries for 15 years from the start of the loan date.
  • The government will grant Rs 1 lakh to all the beneficiaries, in addition to the Rs 1.5 lakh that will be given to all eligible urban poor who want to construct their houses in urban areas or plan to renovate their existing houses. One can also avail loans under this scheme to build toilets in existing properties.

Components:

  • The PMAY seeks to address the housing requirement of urban poor including slum dwellers through the following:
  • Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource
  • Promotion of Affordable Housing under PMAY for weaker section through credit linked subsidy
  • Affordable Housing in Partnership with Public & Private sectors
  • Subsidy for beneficiary-led individual house construction or enhancement

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The targeted group of beneficiaries:

  • Indian women of all religions and castes. All are equally eligible irrespective of caste, creed or religion.
  • People from low income and economically weaker sections of society.
  • SC (Scheduled Castes) and ST (Scheduled Tribes).

Eligibility criteria for PMAY

  • The mission aims to address the housing requirement of urban poor including slum dwellers.
  • Beneficiaries included are economically weaker section (EWS), low-income groups (LIGs) and Middle Income Groups (MIGs).
  • A beneficiary family should comprise of husband, wife, unmarried sons and/or unmarried daughters.
  • The beneficiary family should not own a pucca house in his/her name or in the name of any member of his/her family in any part of India.
  • States/UTs may decide a cut-off date on which beneficiaries need to be resident of that urban area for being eligible to take benefits under the scheme, at their discretion.

Objectives:

  • Ensure that the housing requirements of all urban poor including slum dwellers are met through different verticals.
  • The core objective is to provide central assistance to all implementing agencies through States and UTs for providing houses to all eligible families/ beneficiaries by 2022.
  • Provide pucca house with amenities like water connection, toilet & electricity.
  • Ensure that urban areas are slum-free & that all citizens have access to basic services.
  • Provide houses designed and constructed to meet requirements of structural safety against earthquake, flood, cyclone, landslides, etc. conforming to the National Building Code (NBC) and other relevant Bureau of Indian Standards (BIS) codes

Primary Features:

  • Development of Slum Areas with the help of private participation using land as a resource.
  • Interest Subsidy of 6.5% on housing loans availed by the LIG and EWS groups beneficiaries and an interest subsidy of 3-4% on housing loans availed by MIG beneficiaries under credit link subsidy scheme (CLSS).
  • Pro-Women, preference will be given to females applicants for house allotments.
  • Disabled Friendly - Ground floor of the houses will preferably be given to PWDs or to senior citizens.
  • Eco-Friendly - Construction developers should follow eco-friendly technologies.
  • Affordability - Grant subsidy range anywhere between INR 1 lakh and INR 2.30 lakh to LIG and EWS section of the urban population.

Pradhan Mantri Awaas Yojana (Rural)

In pursuance to the goal - Housing for all by 2022, the rural housing scheme Indira Awas Yojana has been upgraded to Pradhan Mantri Awaas Yojana (Gramin) w.e.f. 1st April 2016. Financial assistance under PMAY will be provided for the construction of the pucca house to all houseless and households living in dilapidated houses in rural areas.

Target:

  • Under the scheme, it is proposed to build four crore pucca houses in total, by the year 2022
  • One crore households would be provided assistance for construction of pucca house during the first phase, from 2016-17 to 2018-19.

Identification of beneficiaries:

  • To ensure that assistance is targeted at those who are genuinely deprived, the PMAY-G selects beneficiary using housing deprivation parameters in the Socio-Economic and Caste Census (SECC), 2011, to be verified by the Gram Sabhas.
  • Identification of beneficiaries eligible for assistance and their prioritization is done using information from the Socio-Economic and Caste Census (SECC) ensuring total transparency and objectivity.
  • The SECC data capture specific deprivation related to housing, which is managed by MIS- PMAY.
  • The list will be presented to Gram Sabha to identify beneficiaries who have been assisted before or who have become ineligible due to other reasons.

Funding:

The cost of unit assistance is to be shared between Central and State Governments in the ratio 60:40 in plain areas and 90:10 for North Eastern and hilly states.

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Features:

  • Identification of Beneficiaries - The selection of beneficiaries will be through a completely transparent process using the Socio-Economic Census 2011 data and validating it through the Gram Sabha.
  • Unit Size - The minimum unit (house) size is revamped from 20 sq. mtr. (Under IAY) to 25 sq. mtr. Including a dedicated area for hygienic cooking.
  • The finished houses come with amenities like toilets, liquefied petroleum gas connection, electricity connection, and drinking water supply.
  • Financial Assistance - The assistance given to beneficiaries under the program is Rs 1,20,000 in plain areas and to Rs 1,30,000 in hilly states/difficult areas /Integrated Action Plan (IAP) for Selected Tribal and Backward Districts.
  • Optional Loan - There is a provision of Bank loan under PMAY up to Rs. 70,000/-, if the beneficiary so requires.
  • Direct Benefit Transfer - The faster completion of quality houses has been assisted by payment of assistance directly into the beneficiary account through the IT-DBT platform.
  • AwaasSoft - In PMAY-G, program implementation and monitoring will be carried out through an end to end e-Governance model- Using AwaasSoft and Awaas App.
  • Geo-Tagging - Space technology and IT platforms are used to monitor the cycle of house construction, from the identification of beneficiary to construction stages of houses to completion and each stage is being geo-tagged
  • Social Audit - The program implementation is to be monitored not only electronically, but also through Social Audit, DISHA Committee, Central and State Government officials, National Level Monitors, etc.
  • NTSA - Towards better quality of construction, setting up of a Nation Technical Support Agency (NTSA) at the national level is envisaged.
  • Convergence with Swatch Bharat Mission - Provision of assistance (Rs. 12,000/-) for toilets by convergence with Swaccha Bharat Mission
  • Convergence with MGNREGA - The beneficiary is entitled to 90 days of unskilled labor from MGNREGA.
  • Convergence with Skill India - To ensure good quality of house construction, Rural Mason Training is organized to facilitate the availability of trained masons in the rural areas. The program provides for skilling 5 lakh Rural Masons by 2019

How to apply for PMAY?                    

One can avail PMAY linked loans from primary lending institutions such as scheduled commercial banks, housing finance companies, Regional Rural Banks, State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, Non-Banking Financial Company, etc.

There are two vertical under which one can apply for PMAY Housing for All.

  1. Slum Dwellers- The slums are areas with 60 to 70 households or 300 individuals living in dilapidated houses without facilities like drinking water, sanitation, and electricity. Only individuals and households living in these areas can apply under this category.

 

  1. Under the Other 3 components- The individuals belonging to Economically Weaker Sections(EWS), Middle Income Group(MIG) and Low Income Group(LIG) can apply under this vertical.

 

 

 

Application Process:

  1. Visit the official Website of PMAY http://pmaymis.gov.in/
  2. Log in using your Aadhar Number and Enter Personal Details as per your Aadhar Card and other proofs of identity.
  3. Choose the category “Under other 3 components” from the Citizen Assessment dropdown.
  4. After entering all the required details, authenticate with captcha and Aadhar OTP as required.
  5. Your application process is complete and you will receive further updates on your mobile as entered during the registration process.
  6. Note that, an individual can apply for PMAY only once. If he/she is found duplicating or defrauding, it leads to heavy penalties and even imprisonment.

Documents Required:

Any of one of the following documents is required for applying for a home loan or subsidy under PMAY “Housing for All” Scheme.

    • Voter Card.
    • Aadhar Card.
    • Valid Passport.
    • Letter from a recognized public authority or public servant verifying the identity and residence of the beneficiary.
    • Latest Utility bill.
    • Rent agreement on stamp Paper.
    • Bank Statements reflecting the address of borrowers of any commercial nationalized bank

 

How is the Subsidy Adjusted?

The interest subsidy is to be the Net Present Value of the interest subsidy amount. For better understanding, suppose on a home loan of Rs 12 lakh, the NPV of the 3% interest subsidy comes to Rs 2.30 lakh. So, out of the loan amount of Rs 12 lakh, the amount of Rs 2.30 lakh will get deducted and the borrower has to pay EMI on the balance i.e. Rs 9.7 lakh at a rate at which the lender is providing loans, which could be 8.75 or 9 percent or whatever the MCLR based home loan rate is the bank.

Also the interest subsidy to the financial institution will be paid upfront resulting reduced net effective loan amount (reduced principal amount borrowed). The borrower will pay the remaining interest on principal amount in the form of EMIs for the term period of the loan.

Benefits under each category:

Household Annual Income Rs

6-12 Lakh

12-18 Lakh

Eligible Loan Amount for Interest Subsidy in Rs

9 Lakh

12 Lakh

Interest Subsidy

4 %

3%

Dwelling Unit Carpet Area in sq. mt

160

200

Max Loan Tenure in years

20

20

NPV subsidy in Rs

2.35 Lakh

2.30 Lakh

 

Conclusion:

A house is the most basic necessity for humankind to live a life of dignity. But, owning a house is still a dream for the majority of people in India due to financial obstacles. In this regard, Pradhan Mantri Awaas Yojana, with both of its Urban and Rural components, is a huge step forward to ensure affordable housing for the poor. The PMAY- Urban and Rural components envisage a co-operative coherence of both public and private participants for speedy completion of projects and more efficient use of technologies for the inclusive growth of the communities.

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