Pradhan Mantri Awas Yojana (PMAY) benefits

The Pradhan Mantri Awas Yojana, or PMAY for short, is actually the flagship initiative by way of the Indian effort at affordable housing for all. Since its inception in 2015, this ambitious scheme has been one of the major commitments from the government towards assuaging one of the country’s most critical challenges: the issue of providing adequate and affordable houses to millions of its citizens.

To understand the significance of PMAY, it is crucial to lay down the historical context of housing problems in India. For the past few decades, rapid urbanization and population growth accompanied by economic disparities have given a woefully inadequate housing shortage in the country, mainly affecting the economically weaker sections and low-income groups of the society. The rampant development of slums in urban and substandard living conditions in rural regions have been stark reminders of this ongoing crisis.

Housing affordability, much more than a roof over one’s head, is actually a very fundamental human right, which is crucial for social stability and even economic growth, not to mention the overall quality of life. Adequate housing can form a basis for good health, education, and employment opportunities. It creates social inclusion and community development at various levels such as individual and family level.

The Pradhan Mantri Awas Yojana appears to be a holistic and transformative solution to problems that have been persistent over the long term. By setting such a challenge before the nation, PMAY has set ambitious goals for “Housing for All” by 2022, which goes beyond only solving the shortage of housing but spurring wide-ranging socio-economic benefits from it. This is going to revolutionize the country’s housing sector, providing numerous advantages ranging from individuals directly targeted to the nation as a whole.

In this article, all the different benefits of Pradhan Mantri Awas Yojana shall be discussed and communicated. Impact of PMAY shall be considered and debated upon as far as aspects of Indian society and economy are considered. Right from boosting the construction sector and allowing job development to improving living conditions and woman empowerment, the influence of PMAY cuts across and deep into many different areas. Moving ahead from here with the benefits is going to amply clarify that this scheme was not for house-building but rather for building new and strong, inclusive, and prosperous India.

## 2. Overview of PMAY

Pradhan Mantri Awas Yojana was launched on 25th June 2015. Formulated as a new deal for India toward affordable housing, PMAY had a mission of housing all citizens by India’s 75th anniversary in the year 2022. The aspiration reflects the promise of the government that every Indian family achieves the pucca house with amenities.

PMAY is segmented into two major parts to cater to the widening housing needs of India that falls in both urban and rural area:

PMAY- Urban (PMAY-U):

This segment deals with housing needs in an urban area. It targets building 20 million houses for the urban poor, slum-dwellers by 2022. The operations of PMAY U are fashioned under four verticals:

In-situ Slum Redevelopment (ISSR)

Credit Linked Subsidy Scheme (CLSS)

– Affordable Housing in Partnership (AHP)

   Beneficiary-led Individual House Construction/Improvement

PMAY-Gramin (PMAY-G):

 It is for rural housing. It has assured 29.5 million pucca houses to all the houseless and kutcha and dilapidated housed dwelling population in the rural areas by 2022. PMAY-G targets:

   – Assisting in pucca house construction

– Beneficiary identification by Socio-economic and Caste Census data

– Benefit convergence of other schemes towards optimal resource utilization

The beneficiary category for PMAY covers a huge chunk of socio-economic groups. In urban areas the beneficiaries are primarily:

EWS with an annual income of up to ₹3 lakh.

LIG with annual income between ₹3 lakh to ₹6 lakh

– Middle Income Groups (MIG) with annual income upto ₹18 lakh (covered subsequently under CLSS)

At the village level, PMAY-G covers kutcha and dilapidated houses. At the top of the list are

– SC/ST households

– Minorities

– Non-SC/ST rural BPL households

– Widow and next-of-kin of defence personnel killed in action

– Ex-servicemen and retired members of paramilitary forces

– Persons with disabilities

– Transgender persons

The multi-faceted implementation strategy under PMAY coordinates with stakeholders:

1. Central Government: It provides over -all policy direction, funding, and monitoring.
2. State Governments: It has to implement the scheme, identify the beneficiaries and facilitate the construction
3. Urban Local Bodies (ULBs) and Panchayati Raj Institutions (PRIs): They are to play a vital role in the selection of the beneficiary at local levels and implementing the scheme.
4. Banks and financial institutions: Extend loans to recipients based upon Credit Linked Subsidy Scheme .
5. Private sector: Was engaged in building and technological instruments.

The scheme depends upon multi-layered approaches that ensure its proper working:

a. Use of technology for selection of beneficiaries as well as effective monitoring of projects

b. Promotion of novel and environment-friendly building technologies

c. Incentivation of public-private partnership

d. Enabling access with utmost transparency and accountability through online monitoring.

Covering both urban and rural housing needs and bringing onboard various stakeholders, PMAY will build up a holistic ecosystem for affordable housing in India. Not only does this holistic approach target the gap in housing but also foster economic growth and social development, as we shall discuss below.

Economic Benefits

# Pradhan Mantri Awas Yojana (PMAY) Benefits

## 1. Economic Benefits

Pradhan Mantri Awas Yojana  Becoming an important motor of economic development in India with implications well beyond just providing housing:

• Empowering the construction industry

  -All-around increase in construction activities in cities as well as in rural areas

  -Fillip to large construction companies as well as SMEs in all aspects of housing development

•Mass employment generation

  -Employment opportunity at all levels and in every profession

– Approximate: 2.69 new jobs generated/₹ 1 lakh in housing

– Decreases unemployment and underemployment also

Increases demand for building materials

Benefits large manufacturers and filters down to perk up local industries;

adds more jobs in ancillary industries as well

GDP growth contribution

The housing sector is linked with about 250 ancillary industries

Generates multiplier effects across related industries

– Returns: It is estimated that every rupee spent in housing will increase by ₹1.54 in the GDP

• Formalization of the real estate industry:

  – Higher transparency in property transactions

  – Increased tax revenue through better compliance

  – More aggressive regulation serving the interest of buyers and sellers

  – More attractive to domestic and foreign investors

• Housing finance sector:

– CLSS enhances availability of housing finance

  -Flow of credit to the Housing sector escalates.

• Innovation promotion :

  -Focus on locally available and environment-friendly technologies

  -Improves India’s global competitiveness about construction technology.

Social Benefits

PMAY Has Brought Social Revolution in India:

• Better lifestyle of the poor:

Pucca houses with only some basic facilities opened up access for the individuals and changed the dignity and self-esteem of beneficiaries and made them indispensable to the social sphere.

• Social security is augmented:

Permanent address ensures that various government schemes and services can be accessed.

Availability of ration cards, voter ID’s and bank account facilities improved.

The vulnerability of economically weaker sections was reduced

Efficacy in Health Outcomes

As sanitation improves, the risk of water borne disease reduces.

Respiratory diseases reduce because of proper ventilation.

Mental health outcomes improve.

Mitigating the Urban-Rural Divide:

Parallel schemes for urban (PMAY-U) and rural (PMAY-G) areas

-Reduced pressure of migration from rural to urban areas

 -Inclusive Urban Development

 •Empowerment of Women through Co-ownership

– Mandatory allocation of homes in either wives’ names or joint names

  – Enhanced economic security for the women

  – Higher decision-making power in families

  – Enhance women’s side access to financial resources

  – Improvement in social status along with safeguarding against domestic violence

•Education output at more advanced levels:

  – A safe child-friendly environment therefore allows children to have better education

•Community development:

– Building community halls and primary infrastructure

  – Fostering community sentiments coupled with social spaces

• Robust communities:

  – Green, disaster-resistant housing technologies

Environmental Advantages

PMAY directly contributes to environmental sustainability too in the following ways:-

• Sustainable building technology:

– Locally sourced materials and traditional practices

  – The norms of green buildings within the city

  – Rainwater harvesting and solar panel fitting feature

• Environment-friendly products

  – Fly Ash bricks became popular due to lesser carbon footprints

  – Recycled products in construction

• Slums and unauthorized settlements have reduced

  – Pollution of Water body and soil polluted has reduced

– Green spaces enhanced on redeveloped areas

• Sanitation and waste management:

  – One toilet per house to put an end to open defecation

  – Community-level waste management systems

– Alleviates pressure on municipal waste management.

• Sustenable landscapes for both the urban and rural scenarios

  – Planned growth

  – Compact, mixed-use development and avoid sprawl and cultuived land

Financial Inclusion Benefits

PMAY is a catalyst for financial inclusion

• Incomes increase as access to formal banks increases

  • Millions of new accounts are opened

• Savings accounts, insurance products, and credit facilities are offered

Opening a bank account becomes mandatory for the recipients

• CLSS Benefits

Benefits from exposure to formal financial institutions because of the incentive of CLSS

Enables building of a credit history

Affordable housing loan turns out to be more accessible

Further saving and investment opportunity

 The saved amount can be used for saving as well as investment.

This in turn boosts saving and repayment behavior

• Long-term wealth generation through property ownership

 Houses is an appreciating asset along with being a supplementary security for borrowed amount towards the future

 Potential for more rise in prices of property

 Rental income

-Economic heritage for future generations

• Macro-economic impact:

– Strengthened and expanded banking and credit sectors

  – Better allocation of capital to core sectors of the economy

  – Beneficiaries have growing financial literacy

Technological Innovations

The process is made more efficient and transparent by PMAY using technology:

• improvement mechanisms for the selection of beneficiary

  – better and digitised beneficiary database

  – better targeting towards real beneficiaries

Error or malpractices would be minimum Possibility

• GIS-based planning

– Max. usage of land

– Better integration of house development with the existing system

– Real-time monitoring of the execution of the project

• New construction technologies

-Prefabricated construction technology development

-Faster and efficient and more cost-effective building

-Durable and sustainable buildings

•Mobile applications tracking and transparency:

Status of application and lodging grievances visible to the beneficiary

Officials track the projects in real-time along with the usage of funds

One-time verification -Aadhaar Interface

Avoids Benefit duplication

Challenges and Future Potential

PMAY has done well, but it has its own challenges

Availability of land specially in urban areas

Funds and subsidies are paid much faster

Millions of houses maintaining quality consistently

Future Outlooks and Development Opportunities:

• More PPPs

• More rental housing than before

• Better linkage with urban development

• More focus on skill building capacity building of the construction industry

There can also be a potential source of synergy through links to other schemes, as follows:

• Better convergence with Smart City Mission

• More pick up with skills building initiatives

The number of quantum and quality aspects in PMAY will assist in arriving at the vision of sustainable and inclusive growth that India may achieve.

Credit-Linked Subsidy Scheme (CLSS)

Credit Linked Subsidy Scheme is one of the major constituents of PMAY: it makes available an affordable home loan to a large section of the income group by granting an interest subsidy on home loans.

### Features include:

* Interest subsidy on home loans that, in simple words means the saving involved in the cost of borrowing.

The level of subsidy varies between 3% to 6.5% based on the income group of beneficiaries.

Maximum amount eligible for subsidy ₹6 lakhs to ₹12 lakhs

Categories of beneficiaries Economically Weaker Section (EWS): ₹3 lakh per annum

Subsidy: 6.5% above ₹600000/- loan amount falls under Low Income Group (LIG): ₹3 lakh to ₹6 lakh per year 

   – Subsidy: 6.5% above ₹600000/- loan amount

3. Middle Income Group I (MIG I): ₹ 6-12 lakhs per annum – Subsidy: 4% above ₹ 9 lakhs on the loan amount

4. Middle Income Group II (MIG II): Annual income between ₹ 12-18 lakhs

   -Subsidy: 3% on the loan amount up to ₹ 12 lakhs

It has enabled many dream of becoming a homeowner, who would have otherwise thought that it was out of reach for them. The EMI burden of the beneficiaries has been significantly reduced with this option by bringing the rate of interest down.

In-situ Slum Redevelopment (ISSR)

ISSR is a significant part of PMAY. This addresses the critical slum rehabilitation challenge in urban areas that prevent the displacement of slum dwelling populations from their existing locations and yet provide them with dignified housing.

### Some Important Features:

– Providing free houses allotment to slum dwellers who are eligible to live

Available land-based public-private partnership

Encourage private developer participation in slum redevelopments

### Implementation Plan:

1. Slum mapping and beneficiary identification

Land pooling along with the grant of development rights

Construction of multi-storey housing complex

Availability of basic amenities with infrastructure

The ISSR model has the additional benefit of better quality of life for slum-dwellers in addition to land re-development and optimal use in denser locations.

##  Affordable Housing in Partnership (AHP)

The AHP promotes affordable housing schemes through government agencies as well as private developers.

### Features:

Direct support of ₹1.5 lakhs per house for eligible projects

Boosts the supply of available affordable housing stock

Each project shall contain at least 35 percent houses in the Economically Weaker Section category

### Project Guidelines:

Minimum number of projects: 250 units

Maximum Carpet area for EWS houses: 30 sq.mt

Allotment criteria for allottees shall be as notified by the State Governments.

AHP has beneficial effects with regard to inducing the private sector to invest in affordable housing which in turn increases the overall housing stock supplied to the low-income groups.

Beneficiary-led Construction (BLC)

The BLC sub-programme permits beneficiary’s active involvement in the construction or upgradation of his/her own house with financial support and technological guidance.

### Key Features:

Financial assistance for: New house construction ₹1.5 lakhs

Financial assistance for: Up-gradation/extension of existing houses ₹1.5 lakhs

– Technical support provided on designing and planning of house

### Criteria for beneficiary:

Beneficiary should be owner of the land or should have rights to construct on the land.

Annual income should be in EWS or LIG category.

Should not have any pucca house anywhere else in India

The BLC scheme has been largely successful in the rural and small town areas where land availability is less of a problem as compared to the major urban centers.

Other Benefits and Schemes

Besides the above four options, PMAY has several other benefits and is facilitated by a number of other schemes:

### GST Benefits

There are cuts on the rate relating to GST on affordable housing projects that attract 1% GST, whereas under-construction properties other than affordable housing attract 5% GST.

### PMAY-Gramin (Rural)

This program covers the need for housing in rural areas, and the scheme provides ₹1.2 lakhs for construction in plain areas, and ₹1.3 lakhs in hilly/difficult areas.

Supplementary funds can be drawn under MGNREGA for construction.

### Technology Sub-mission:

Promotes the adoption of latest green and disaster resilient technologies for housing

Promotes the innovative use of building materials and technologies

### Capacity Building:

Capacity Building of PMAY stakeholders will be offered

Professional skill building among construction workers

## Impact and Challenges

It has been able to bridge the housing deficit of India to a large extent. Millions of houses have been sanctioned under the different components of the scheme by 2024. Of course, not only has it given shelter, but also employment, boos construction and contributed to developments both in towns and villages.

However, there are still challenges;

Shortage of land in urban areas

Delays in completion of projects

Some of the projects lack quality.

It extends to the most vulnerable sectors of society

Conclusion

The Pradhan Mantri Awas Yojana is one kind of transitional way of building solutions for housing in India, alongside economic growth, social empowerment, environmental sustainability, financial inclusion, and technological advancement.

Impact on the overall development of the nation-the diversified impact of the PMAY. This scheme benefits the large population of India by providing millions of families with availability of affordable housing and resulting in the reduction of poverty and improved health in their life and a general quality of life.

Indeed, long-term vision of the nation is very much in line with the dream of becoming a developed country. It, therefore, has the potential to reinforce economic growth while adding a social dimension to it. So, through sustained and inclusive urbanization, PMAY is an attempt at starting to lay down those foundations for more prosperous and more inclusive India. And as the scheme unfolds and faces its implementation challenges, it can go on to reshape the housing landscape of India from mere houses into homes and communities upon which national development may be based.