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Thrust Continues by the Government for Affordable Housing

The first three years post the launch of Pradhan Mantri Awas Yojana saw quite a progress in its plans in different states of the country. For instance, states of Uttar Pradesh, Madhya Pradesh and Chhattisgarh saw plans for rural housing completed by 61%, 44% and 43% respectively. However, even with steady progress, a lot of work remains to be completed under this scheme. That is why the government has proposed to continue with its thrust for affordable housing in the Union Budget 2019.

The finance minister has proposed an increase in the number of beneficiaries for PMAY subsidy. Additionally, the government also aims to increase the pace of construction of houses between financial years 2020-22. Even though chances of meeting the original target of this scheme by 2022 look bleak, there is hope that next few years will see a considerable growth in the amount of work completed.

What does the PMAY scheme entail?

With the introduction of Pradhan Mantri Awas Yojana scheme in the year 2015, the government had undertaken several affordable housing schemes for economically backward sections of both rural and urban India. Under this scheme, there are plans to build 12 million houses for urban poor by March 2022. Additionally, there is a PMAY subsidy that includes credit linked subsidy scheme or CLSS. The CLSS makes housing affordable for middle class category.  It enables individuals to avail home loan at a subsidized rate of interest from various financial institutions in India.

The PMAY scheme can be availed by individuals belonging to economically backward section of our society. Individuals belonging to the following categories satisfy the PMAY eligibility and can apply for the benefits of the scheme:

  • Economically weaker section or EWS, having an annual household income of less than Rs. 3 Lakh.
  • Low-income group of LIG having a yearly household income between Rs. 3 Lakh and Rs. 6 Lakh.
  • Medium Income Group or MIG I having an annual household income between Rs. 6 Lakh and Rs. 12 Lakh.
  • Medium Income Group or MIG II, having an annual household income between Rs. 12 Lakh and Rs. 18 Lakh.

Thus, if you belong to any of the category mentioned above, you can avail the benefits of the Pradhan Mantri Awas Yojana scheme.

PMAY in 2019- plans for the future

In the 2019 Budget, the finance minister has proposed several reforms for PMAY scheme, which can help to increase the pace of work getting done. For instance, the budget proposed that 1.95 Crore houses will be constructed between 2020-22 under PMAY, which will have basic amenities like toilet, electricity and LPG. Also, the time for completion of houses each year will be reduced from what it was between 2015 and 2018.

Further, there are plans to undertake reforms that will promote rental housing. Since the current laws do not address tenant-landlord relationships properly, the situation of rental housing is quite grievous in India.

Under Budget 2019, PMAY subsidy will be provided at the following rates:

  • 5% on loan amounts of up to Rs. 6 Lakh for beneficiaries belonging to EWS/ LIG.
  • 4% on loan amount of up to Rs. 9 Lakh for beneficiaries belonging to MIG-I.
  • 3% on loan amount of up to Rs. 12 Lakh for beneficiaries belonging to MIG-II.

Thus, individuals belonging to the categories above can avail home loans from various financial institutions of India like Bajaj Finserv at a subsidized housing loan interest rate.

Furthermore, Bajaj Finserv provides several pre-approved offers that can make availing loans faster and easier. These offers are available on various financial products, including secured credits like home loans and unsecured credits like business loans, personal loans, etc. You can check your pre-approved offers by providing your name and phone number.

The government aims to continue with the subsidy on interest rates for FY 2019. Further, the government will also provide up to Rs. 1.5 Lakh per EWS and Rs. 1 Lakh for every dweller for the redevelopment of slums.

The aim for Pradhan Mantri Awas Yojana 2019 is to ensure an increase in the amount of work done. Thus, the push for affordable housing by the government reflects on the budget for 2019.