The Cabinet Committee on Friday gave its nod for the Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0, which would offer financial assistance to 1 crore urban poor and middle-class families to construct, purchase or rent a house at an affordable cost in urban areas in five years (2024-25 to 2028-29). The PMAY-U is a crucial flagship initiative of the Central government designed to ensure that every eligible individual in urban regions is provided with durable ‘pucca’ homes regardless of weather conditions.
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Under the Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0), eligible beneficiaries will receive financial assistance for the construction of houses. The assistance provided is Rs 1.2 lakh in plain areas and Rs 1.3 lakh in North Eastern Region States and Hill States like Himachal Pradesh, Uttarakhand, and Union Territories of Jammu & Kashmir and Ladakh.
The Narendra Modi-led government has undertaken the initiative to construct a total of 10 million residential units for the benefit of urban lower-income and middle-class households. This ambitious project entails a substantial investment of Rs 10 lakh crore, which includes a government subsidy amounting to Rs 2.3 lakh crore.
In the initial phase of the PMAY-U 2.0, a total of 1.18 crore houses have been authorised, of which over 85.5 lakh houses have been successfully built and handed over to the rightful recipients.
“In pursuance of the Prime Minister’s vision, PMAY-U 2.0, with an investment of Rs 10 lakh crore, will address the housing needs of one crore families, ensuring that every citizen leads a better quality of life,” the government in a statement said.
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Under the PMAY-U 2.0, families belonging to economically weaker sections, low-income group, or middle-income group having no pucca house anywhere in the country are eligible to purchase or construct a house
EWS households are families with an annual income up to Rs 3 lakh.
LIG households are families with an annual income from Rs 3 lakh up to Rs 6 lakh. MIG households are families with an annual income from Rs 6 lakh up to Rs 9 lakh.
In his Independence Day speech in 2023, PM Modi unveiled plans for a new housing scheme aimed at providing assistance to underprivileged and middle-class households in acquiring their own residences.
In his speech, PM Modi said: “The weaker sections living in the cities face a lot of problems. Middle-class families are dreaming of buying their own houses. We are coming up with a new scheme in the coming years that will benefit those families that live in cities but are living in rented houses, slums, chawls, and unauthorised colonies. If they want to build their own houses, we will assist them with relief in interest rates and loans from banks that will help them save lakhs of rupees.”
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Other funds
The corpus fund of Credit Risk Guarantee Fund Trust (CRGFT) has been increased from Rs 1,000 crore to Rs 3,000 crore to provide the benefit of credit risk guarantee on affordable housing loans from banks or Housing Finance Companies.
Furthermore, the government has also introduced the Interest Subsidy Scheme, aiming to extend subsidies on home loans for economically weaker sections and lower and mid-income group families. Qualified beneficiaries securing a loan up to Rs 25 lakh with a house value up to Rs 35 lakh will receive a 4% interest subsidy on the first Rs 8 lakh loan for up to a 12-year tenure. A maximum of Rs 1.8 lakh subsidy will be disbursed to eligible beneficiaries in 5-yearly installments through a push-button mechanism. Beneficiaries will have access to their accounts via website, OTP, or smart cards.
