Pradhan Mantri Awas Yojana

Introduction
India is the second most populated country in the world. In 2021, it had a population of 1.36 billion which is expected to reach 1.52 billion by 2036. This rapid population growth, fuelled by a fast-growing economy, has led to a spike in demand for housing. India’s urban population is anticipated to increase from 410 million in 2014 to 814 million by 2050. India is also expected to build four megacities by 2030, bringing the total number to seven. In the rural sector, demand for housing has also expanded significantly. The government has launched the Pradhan Mantri Awas Yojana to meet this rising demand.

Pradhan Mantri Awas Yojana
Pradhan Mantri Awas Yojana (PMAY) was a flagship scheme initiated by the Ministry of Housing and Urban Affairs in 2015. The scheme aimed to meet the rapidly surging demand for housing for the Low Income Group (LIG), Middle Income Group (MIG) and Economically Weaker Section (EWS) of the society. This scheme intends to provide qualitative housing for all by 2024. The scheme is based on a demand drive approach wherein demand for housing is being assessed according to the states and union territories. To further expand its outreach, the scheme has been subdivided into urban and rural. For PMAY-Urban, several Urban Local Bodies (ULBs), Central Nodal Agencies (CNAs), State Level Nodal Agencies (SLNAs) and Primary Lenders are the key stakeholders. The scheme aims to provide cheap and affordable housing equipped with basic amenities. For PMAY-Gramin, the scheme is committed to providing ‘housing for all’; it aims to provide 2.95 crores of housing by the end of 2024.

Implementation of PMAY
PMAY includes four essential components to realise the goal of providing affordable housing for all. These components are based on a customised approach which further improves its outreach. The major components are as follows:

• In-situ Slum Redevelopment (ISSR):
  The lands on which slums reside will be rehabilitated with the assistance of private developers under this component of the PMAY initiative. Slum rehabilitation grants of Rs. 1 lakh (US$ 1,263) per dwelling would be offered for slums located on central/state government lands. After the redevelopment of these slums, the de-notification of slums is completed under the state and union territory guidelines. Under this scheme, houses are built under two components: slum rehabilitation and free sale. Under the slum habitation program, houses are given to slum dwellers with basic civic infrastructure while in the case of free sale, affordable housing is sold on the open market.
• Credit Linked Subsidy Scheme (CLSS):
  CLSS is one of the major components under PMAY. The main aim of this scheme was to provide cheap mortgages to beneficiaries through interest subsidies. To distribute this subsidy to the beneficiaries through lending institutions and to track progress, the Ministry of Housing and Urban Development selected the Housing and Urban Development Corporation (HUDCO), National Housing Bank (NHB), and State Bank of India (SBI) as CNAs. The scheme was further divided into three categories:
  • EWS and LIG: Economically weaker sections or low-income groups are families with yearly household income ranging from Rs. 3 lakh (US$ 3,791)-Rs. 6 lakh (US$ 7,583).
  • MIG-I: This is the Middle Income Group-1 category which includes annual income of Rs. 6 lakh (US$ 7,583)-Rs. 12 lakh (US$ 15,166).
  • MIG-II: This is the Middle Income Group-2 category which consists of beneficiaries whose annual income ranges from Rs. 12 lakh (US$ 15,166)-Rs. 18 lakh (US$ 22,747).

Source: PMAY

• Affordable Housing in Partnership (AHP):
  AHP is one of the important components required for the implementation of PMAY. Unlike CLSS, AHP is only applicable to the EWS category. Under AHP, houses are built as per the Public-Private Partnership (PPP) model and housing projects get qualified for central assistance only if 35% of the houses in the project are built for the EWS category. For each house, the centre provides Rs. 1.5 lakh (US$ 1,900) per EWS house.
• Beneficiary-Led Individual House Construction/Enhancement (BLC-N/BLC-E):
  In the case of BLC, the government provides central assistance of Rs. 1.5 lakh (US$ 1,900) to the EWS category for individual house construction and enhancements. The total area under this scheme should not be less than 21 sqm and not be more than 30 sqm.

Impact of PMAY
The impact of PMAY was felt across the urban and rural areas. For PMAY-U, a total of Rs. 2.03 lakh crore (US$ 25.65 billion) was sanctioned, of which Rs. 1,20,130 crore (US$ 15.18 billion) was already realised by the centre. A total of 102.23 lakh houses have been grounded, of which 61.50 lakh houses were constructed. In the last four years, overall 89,90,838 houses have been sanctioned, 78,92,361 grounded for construction, 54,08,086 completed and 48,66,306 allotted/occupied by recipients.

Source: PMAY

Under PMAY for the rural sector, a total target of 27,192,795 was set by the Ministry of Rural Development (MoRD). Out of this, 26,971,843 houses were registered and 24,459,587 houses were completed. The states with the highest completed houses are Bihar, West Bengal, Madhya Pradesh and Uttar Pradesh. An illustration of the targeted v/s completed houses under PMAY-G is shown below.

Source: PMAY

Road Ahead
The Pradhan Mantri Awas Yojana has helped a vast number of low- and middle-income residents by giving excellent houses with toilets, LPG connections, and electricity. The scheme has been able to help India meet its need for affordable housing. The scheme has been a boon for the real estate sector, as it has been able to develop a healthy ecosystem between the beneficiaries and the developer. In the long term, demand for affordable housing is expected to rise significantly, which would lead to the development of new urban centres. This scheme will be able to enable every individual to satisfy their housing demand while simultaneously lowering the cost of housing to less than the country's per capita GDP.