PMAY-HFA (Urban) | What is Pradhan Mantri Awas Yojana Urban?

Table of Contents

Demand drivers for PMAY-U units in India
Components of PMAY-U
Unit size and subsidy benefits for PMAY-U home buyers
How to calculate PMAY-U subsidy
Tracking the progress of PMAY-U
Major highlights of PMAY-U in India
Major hindrances affecting PMAY-U
How can PMAY-U tackle challenges?
FAQ

Launched on June 25, 2015, the Pradhan Mantri Awas Yojana-Urban (PMAY-U) aims at bridging the housing deficit in urban India. In the face of rising property prices, the scheme envisages to provide homes to the lower and mid-income groups in urban areas. On November 12, 2020, finance minister Nirmala Sitharaman increased the total outlay for the PMAY Urban scheme by Rs 18,000 crores, in the light of the Coronavirus pandemic and its impact on demand. The increased budget will help 18 lakh houses to be completed and 12 lakh houses to be grounded. An additional 78 lakh jobs, increased consumption of steel and cement, as a result of this increased budget allocation, will also help the economy, the FM said.

In this article, we track the progress of the PMAY Urban scheme in India, its popularity, as well as pitfalls, scope and the way ahead.

Demand drivers for PMAY-U units in India

The PMAY-U subsumes all the previous urban housing schemes and aims to address the urban housing shortage of 20 million by 2022. So far, 4,427 cities/towns have been included under the PMAY-U. Demand for housing has only increased in the last decade, driven by favourable demographics, increasing urbanisation, growth in the economy, rise in income, growth in the number of nuclear families, rise in the number of first-time home buyers and easier availability of home loans.

All about the progress of the PMAY-Urban scheme in India

Components of PMAY-U

Component	Mission
In-situ slum redevelopment	Aims to provide well-built houses, with basic facilities to eligible slum-dwellers. It leverages land as a resource and redevelops slums with the help of private participation.
Affordable housing through partnership	To provide affordable housing to EWS, by offering financial assistance and developing projects in collaboration with the public or private sector. Government assistance will be available, if the project has more than 250 units, of which at least 35% is in the EWS/LIG/MIG category. The government has also prepared a draft model PPP policy for affordable housing.
Beneficiary-led individual house construction or enhancement	Financial assistance to individuals in the EWS category, to construct a new house or enhance existing house under certain conditions.
Credit-Linked Subsidy Scheme (CLSS)	Provides subsidy to first-time home buyers in the EWS and LIG category.

Unit size and subsidy benefits for PMAY-U home buyers

Category	Size of the dwelling in sq metres (carpet area)	Annual income in Rs lakhs	Loan amount in Rs lakh	Subsidy (in %)
MIG-I	160	6-12	Up to 9	4
MIG-II	200	12-18	Up to 12	3

How to calculate PMAY-U subsidy

A subsidy calculator is available on the official website. All you need to do is click on the ‘Subsidy Calculator’ tab and proceed, to input details such as your annual family income, loan amount, tenure, etc.

Also read: How does the credit-linked subsidy scheme for EWS and LIG work?

Tracking the progress of PMAY-U

The initial uptake on the scheme was slow but the scheme picked up pace in FY2019. In January 2018, only 8.5% of the planned houses had been completed. However, the rate of completion increased to over 31% by June 2019, as the government increased its focus on the completion of sanctioned houses. The occupancy rate of completed houses has remained steady and was close to 92% in June 2019.

In 2020, the validated demand for affordable housing stood at 1.12 crores. By December 2019, one crore homes were sanctioned. The central assistance committed for the mission so far, amounts to Rs 1.66 lakh crores, out of which Rs 72,646 crores has already been released. The total investment is Rs 6.41 lakh crores, as per the official data.

Units sanctioned:105.6 L

Units grounded: 66.23 L

Units completed: 35.18 lakh

Major highlights of PMAY-U in India

Timeline	Highlight	Aim
Ongoing	Technology Sub-Mission (TSM)	About 33 alternate technologies have been identified, out of which the Central Public Works Department (CPWD) has issued SoR for 29 technologies. 15 lakh units have been constructed using such technologies.
October 2, 2019- December 2019	Angikaar Campaign	A campaign with door-to-door activities, ward and city-level events, to promote and make available Ujjwala for LPG connection, water conservation, tree plantation, solar and waste management, for PMAY-U beneficiaries.
Continuous	Social audit of PMAY projects	Seeks to study progress and impact of PMAY-U on the beneficiaries and stakeholders. Feedback is taken from direct beneficiary groups, elected representatives in Parliament, state assemblies and urban-local bodies, and representatives from the local self-governing bodies.
Continuous	PMAY-U app for beneficiaries	Beneficiaries can upload photos of completed units and track their application.
March 2019	Global Housing Technology Challenge	To identify innovative technologies from across the globe for the housing construction sector that are cost-effective, sustainable, eco-friendly and disaster-proof. 72 potential future technologies were identified.
November 25, 2019	CLSS Awas Portal (CLAP)	To integrate all stakeholders in a real-time environment.
January 14, 2020	HousingForAll(dot)com launched	To make available affordable projects that have received occupancy certificates.
February 14, 2020.	45-day all-India online home-buying festival	For the initial 15 days, buyers were able to view offers and shortlist their homes and shall be able to start making the purchase of homes from March 1 till the end of the month.
May, 2020	PMAY CLSS extended	The CLSS scheme was extended till March 31, 2021. Expected to attract investment worth Rs 70,000 crores.
July 8, 2020	Affordable Rental Housing Complexes gets cabinet nod	PMAY affordable rental housing scheme launched, to provide affordable rental housing for migrants and urban poor. To be treated as a sub-scheme of the PMAY-U.

Major hindrances affecting PMAY-U

Scarce availability of land in urban areas.
High unit price, especially in areas like the Mumbai Metropolitan Region and Delhi.
Lukewarm response from private developers.
Increasing cost of raw materials.
Operational challenges that make it difficult for financial institutions to provide the benefits to those with poor/no credit history, irregular and informal income sources.

How can PMAY-U tackle challenges?

Unlock prime land

The government needs to unlock developable land at prime locations, which are under government bodies or no-development zones in cities and allocate these to affordable housing projects.

“Private and idle forest land existing in the city such as in Thane, Borivali, etc., should be utilised. People who want homes are those working in the cities and this would be a good idea,” says Rajan Bandelkar, vice-president, west, NAREDCO.

Streamlining of processes

Although a lot of ground has been covered to increase transparency and streamline the processes, a considerable amount of work still needs to be done. The government should implement an online, single-window approval system across the country, to streamline the processes.

Strengthen the database

A city-wise database for EWS/LIG beneficiaries should be created, to help identify the right beneficiaries. The government should also provide identification papers/land titles, especially in the case of slum-dwellers.

Standardised project plans and designs

A set of guidance documents with standard project plans/unit plans can be developed, which can be used by the developers and can help in fast-tracking the approval process for projects, thereby, saving effort, time and cost and avoiding implementation issues. The government has introduced risk-based classification of buildings to fast-track building plan approval, inspection and grant of occupancy-cum-completion certificate in some cities and could look at implementing the process across the country.

Leverage innovative and low-cost technology

The government can prepare a set of guidelines regarding the use of low-cost technology/construction methods and raw materials, to help developers implement these techniques in their projects.

“Construction technology in China, Hong Kong, Singapore can be used in India. The government should also reduce duty/taxes on technology that can be imported,” says Pradeep Aggarwal, founder and chairman, Signature Global.

FAQ

Who are all eligible under the PMAY scheme?

Those who do not own a pucca house and have not availed of central assistance under any housing scheme from the government of India are eligible for the PMAY. A beneficiary family will consist of the husband, wife, unmarried sons and/or unmarried daughters.

How much subsidy can one avail of under PMAY?

For MIG I and MIG II, interest subsidies of 4% and 3% on loan amounts of up to Rs 9 lakhs and Rs 12 lakhs, respectively, is valid.

What is carpet area?

The area enclosed within the walls which is the actual area to lay the carpet is the carpet area and does not include the thickness of the inner walls.

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