City Dwelling Made Easier: PM Modi Reveals Upcoming Homeownership Initiative

byMehak BaglaAugust 17, 2023
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Synopsis of the News:

  • Speaking to the nation on the occasion of the 77th Independence Day, Modi announced that his administration is set to introduce a program targeting urban middle-class households without residential property.
  • As per the ministry’s data, approximately 118.9 million residences have received approval within PMAY (Urban) until July 31 of the current year, with 7.6 million of these units having been successfully distributed to their intended beneficiaries.
  • On June 25, 2015, the Prime Minister inaugurated the Pradhan Mantri Awas Yojana – Urban (PMAY-U), a cornerstone initiative of the Central Government.

During his address on the 77th Independence Day, Prime Minister Narendra Modi announced the impending launch of a scheme aimed at providing interest relief on bank loans for urban dwellers aspiring to own their homes. He emphasized that this initiative is particularly geared towards middle-class families residing in cities but lacking residential properties.

Prime Minister Modi highlighted the challenges faced by underprivileged urban residents without homes, stating, “The struggles faced by those without residences in cities, especially the middle-class yearning for homeownership, have prompted us to take action.” 

He went on to declare, “In the near future, we will unveil a comprehensive scheme to extend significant financial assistance, involving substantial sums of money, to families residing in rented accommodations, informal settlements, and unauthorized colonies within urban areas. This aid will empower them to actualize their dreams of constructing their own dwellings.” The prime minister delivered these remarks from the historic, Red Fort.

Pradhan Mantri Awas Yojana- Urban

There is also an existing Housing Initiative – Pradhan Mantri Awas Yojana Urban (PMAY-U) – for Urban Needy, which was introduced by the Prime Minister on June 25, 2015. The Pradhan Mantri Awas Yojana Urban (PMAY-U) is an ongoing housing program aimed at offering durable homes equipped with essential amenities to eligible urban recipients across the nation.

As per the records of the Union Housing and Urban Affairs Ministry, a total of 118.90 lakh houses have been approved for construction as of July 31, 2023, based on project proposals submitted by various states and Union territories. Among these sanctioned units, 76.02 lakh residences have been successfully finished and handed over to their respective beneficiaries.

The scheme operates through four distinct categories – beneficiary-led construction, affordable housing in partnership, in-situ slum redevelopment, and the credit-linked subsidy scheme – each aligned with specific eligibility standards.

All proposals put forward by states and Union territories have been taken into careful consideration by the ministry.

The initial timeline for PMAY-U, which was initially set until March 31, 2022, has been extended until December 31, 2024 (excluding the credit-linked subsidy scheme segment). This extension aims to facilitate the completion of all houses sanctioned before March 31, 2022, without altering the funding structure and execution methodology of the program.

Within the framework of PMAY-U, the Central government contributes a fixed sum of Rs. 1 lakh for the in-situ slum redevelopment category and Rs. 1.5 lakh for both the affordable housing in partnership and beneficiary-led construction sections of the scheme.

For the credit-linked subsidy scheme component of PMAY-U, economically weaker section and low-income group beneficiaries were formerly provided an interest subsidy at a rate of 6.5 percent, equivalent to up to Rs. 2.67 lakh per dwelling.

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