Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana

by Ankit Jaiswal on Investing Basics
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What is Pradhan Mantri Awas Yojana?

Owning a house is a dream for everybody. But the growth in the real estate sector and high property rate makes it difficult for an individual to buy property in India. You need to spend a lump sum amount of money to buy a new house or a flat. In order to address this issue, the government has introduced Pradhan Mantri Awas Yojana to provide houses at very affordable rates.

Pradhan Mantri Awas Yojana is a government subsidy scheme for families buying their first house. This scheme also known as Housing for All, was launched by our honorable prime minister, Narendra Modi on 25th June 2015. It is mostly targeted to the poor people living in the Low Income Group (LIG) and Economically Weaker Section (EWS) categories in the urban establishment of our country. It aims to build more than two crore houses in different parts of India over a span of 7 years.

What is the objective of Pradhan Mantri Awas Yojana?

  1. The primary and most important objective of PMAY is to provide pucca housing to all affordable by the year 2022.
  2. Next important objective is to include the widows, lower income group people, transgender and providing them with affordable housing scheme.
  3. In PMAY, the Government also aims to implement and monitor the programme through an end-to-end e-Governance model using AwaasSoft and Awaas app.
  4. It also aims to make registration mandatory to avail the benefits of the scheme which includes strict beneficiary names to be mothers or wives.

Who are the beneficiaries and what is the eligibility criteria of the PMAY?

The main beneficiaries of this housing for all scheme 2022 will be:

  • Economically weaker section(EWS)
  • Women
  • People who belong to Scheduled Castes(SC) or Scheduled Tribes(ST)

The applicant in order to verify that he/she belongs to the LIG or EWS group needs to submit an affidavit or self-certificate as a proof of income. Moreover, the income of the individual should not exceed the following limit-

  • Rs 3,00,000 p.a. for EWS individuals
  • Rs 6,00,000 p.a. for LIG individuals

However, the age of the individual applying for the scheme should be between 21 to 55 years.

Pradhan Mantri Awas Yojana

What are the important features of Pradhan Mantri Awas Yojana?

  1. The house to be purchased or constructed should be in the name of the female head of the family or under the joint names of the male and female head of the family.
  2. The applicant does not require any additional document except a declaration of not owning a pucca house. However, if the person does not have an income proof, an affidavit needs to be submitted.
  3. The interest subsidy is available for loans taken for the construction of a new house and the addition of a room, toilet, kitchen etc. to the existing house as an incremental housing. The carpet area made under this component should be up to 60 sq meters for LIG and 30 sq meters for EWS category. The individual, however, can construct a bigger house.

What is the benefit of Pradhan Mantri Awas Yojana?

“Pradhan Mantri Awas Yojana is not just about merely building houses. This is a significant step in making the dreams of the poor come true” – Narendra Modi

  1. Promotion of affordable housing for the weaker section
  2. The individuals who belong to LIG or EWS group are able to avail the loan at a subsidized rate of 6.5%.
  3. There is no limit on the amount of loan.
  4. Stakeholders can check the progress of the scheme through online reporting.

Moreover, this will be valid for a period of 15 years or during the loan tenure (whichever is lower) on the initial amount of Rs 6,00,000. However, this subsidized rate is not applicable to additional loan i.e. beyond Rs 6,00,000.

Different Phases of Pradhan Mantri Awas Yojana

The focus of the Indian government is on the creation of housing units under three different phases-

Phase 1: This phase has already started in April 2015 and will continue up to March 2017 and 100 cities are selected under this.
Phase 2: The phase 2 will take place between April 2017 to March 2019 and will cover an additional 200 cities.
Phase 3: It is the last phase of the scheme, all the remaining cities will be covered and it will take place from April 2019 to March 2022.

You can also read 7 government of India schemes to invest for social security\

How and where do I apply for Pradhan Mantri Awas Yojana?

PMAY can be applied in two categories:

  1. Under other 3 components: There are basically 3 types of economically weaker section in the society- Economically Weaker Section(EWS), Low-Income Group(LIG) and Middle Income Group(MIG). EWSs are required to have a minimum annual income cap of Rs. 3 lacs, LIGs have a cap of Rs.3-6 lacs whereas MIGs are required to have a minimum cap of Rs.6 lacs and maximum cap stands at 18 lacs.
  2. Slum Dwellers: People who stay in poorly built residences and there is lack of proper infrastructure, water and sanitation facilities can also apply for the Housing Scheme for all by 2022 under PMAY scheme.

FAQs on Pradhan Mantri Awas Yojana scheme

What if I already own a plot or a kachha house? Can I still apply for a subsidy?
The main take away from this scheme is that the applicant should not own a pucca house, otherwise he will not be eligible to apply for this scheme.

Can subsidy amount be adjusted against tenure or only the loan amount?
The applicant must note that subsidy amount cannot be adjusted against the tenure. The implication of the subsidy will only be on the principal amount due to which the EMI may be impacted.

What does Household/beneficiary constitute?
i. A beneficiary family will consist of husband, wife, unmarried son or daughter
ii. An adult earning member can be treated as separate earning member.

Are there any exceptions in female ownership in property in Economically Weaker Section/Low-Income Group Scheme?
Adult female membership has been made mandatory in property structure. In case an adult member of a household is absent, the property can be registered in the name of a male member only.

What are the things to be done after the first login?
i. Update profile
ii. Change self-password
iii. Update all master data
iv. Add/update project in charge details
v. Add/update bank account details

How to calculate the subsidy amount?
One can calculate the subsidy amount by simply clicking on the “NPV Subsidy Calculator” in the main menu. He/she just needs to enter the loan amount, rate of interest and loan period.

How do I search for a beneficiary?
If anyone wants to search for a beneficiary, then click on “Search Beneficiary” in the main menu, then click on “Search by name”

Enter the first 3 characters of the name and then press show button.

List of beneficiaries will appear on the screen as shown below-

On clicking on the name, the details of all family members will be displayed.

Conclusion

It is a revolutionary scheme that will improve the life of an individual. It will be a great gift to the Indian Citizens on the eve of 75th anniversary of our Independence. Our Prime Minister is determined to make sure that every citizen gets a home at an affordable price.

Register for Government Financial Schemes FREE online course to know more.


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