In the year 2015, Prime Minister of India, Mr. Narendra Modi, introduced the concept of Pradhan Mantri Awaas Yojana (PMAY). The aim of this program is to make housing affordable for all. This includes reduced subsidy rates and discounted prices of houses for the urban and rural poor when they approached a bank or finance company in India for home loans.
This program targets to build 20 million affordable houses by the year 2022. The Government envisions building affordable houses complete with basic amenities with electricity and water supply.
The program was initially devised to be offered to people in the Economically Weaker Section (yearly income less than Rs. 3 lakh), and Low Income Group (yearly income less than Rs. 6 lakh) sections, but now is available to the mid-income group too.
Why is PMAY important?
As per statistics, there are lakhs of unsold residences that cost Rs. 50 lakhs and above. Nevertheless, there are people who are still homeless or living in chawls and slums in India. There is a huge shortage of homes. About 20 million homes to be specific.
At this rate, India will never develop. The rural and urban citizens require homes that they can afford. The PMAY will hopefully incentivize India’s construction and realty sector to reduce its traditional obsession with affluent homebuyers in the cities.
- Financial backing
PMAY’s strongest advantage is the amount of subsidy on offer for the eligible households. The key beneficiaries of economically weaker sections will now have a lower repayment burden with this subsidy.
Interest rates on home loans by banks or financial companies are typically from 9% to 12%. However, with the PMAY scheme, you get a subsidy of 6.5%. This indirectly brings down the EMIs applicable on the home loan. This program is expected to drive affordable housing scheme envisioned by the central government.
- Housing within reach
The government has pledged to construct over 2 crore houses by 2022, according to the PMAY. This movement will be essential in raising the standard of living of India. Construction has already begun in states like Maharashtra, Assam and West Bengal.
According to a recent survey, over 50% of India’s population resides in rural areas. Therefore, this initiative will be a blessing to the economically backward population of the country.
- Economic development now possible
The PMAY was introduced to benefit the lower-class population particularly in the rural areas of the country where people’s income is not as high as that of the urban areas of the country.
These projects will enhance the living condition of the mid-income sector and poorer sections of the society. As an additional impetus, it will assist in the growth of real estate industry and associated sectors.
- Special benefits
Women coming from the economically poorer strata of the society are expected to benefit substantially from this scheme while availing home loans from a bank or a finance company in India. Special groups like senior citizens and differently-abled people too are expected to claim advantages from this program.
To wrap up
As a part of its push towards universal growth across the nation, the central government has introduced many welfare schemes. The PMAY is one such scheme that is expected to remove a lot of burden of home loan repayment for the low-income group households in India.