Housing for All – The Economic and Social Impacts of the PMAY

Housing for All – The Economic and Social Impacts of the PMAY


The Housing for All by 2022 Scheme launched by the Government of India has far-reaching impacts that are seen across sectors. Check out the various benefits and features of this revolutionary welfare scheme.

Food in the belly, clothes on the back and a roof above head – the three primary necessities of all humans. Sadly, in our country, even after seven decades of independence, large majorities of our people don’t have a home to call their own.

This was one of the key factors that led our current government under the helm of our Honorable Prime Minister Shri Narendra Modi to introduce the Pradhan Mantri Awas Yojana in 2015.

What is the Pradhan Mantri Awas Yojana?

The primary aim of this welfare scheme is to provide all-weather pucca houses to every family in India, by the year 2022. The scheme is divided into two main categories: Urban and Rural, with the Urban half focusing on providing the urban poor with affordable all-weather houses, while the rural half of the scheme focuses on the rural poor.

The Four Key Aspects of the Pradhan Mantri Awas Yojana

  • In situ Slum Rehabilitation – This aspect of the Yojana focuses on slum dwellers. They can avail up to 1lakh rupees as benefit from the central government, for the construction of a pucca house.
  • Housing Construction Assistance – This is for people belonging to the EWS (Economically Weaker Sections) of the society for construction or renovation of an existing house. Beneficiaries can receive central assistance up to 1.5lakh rupees.
  • Partnership Housing – Under this component, central assistance of 1.5lakh rupees would be provided to beneficiaries who don’t own a house/land in their name. This financial assistance is available for houses built in partnership with state or UT Governments.
  • Credit Linked Subsidy Scheme – This scheme is for all citizens who can afford to build a house with the help of a home loan. The subsidy is offered for the interest component of the home loan, and the subsidy amount depends on the income levels of the beneficiary.

Key Impacts of the Pradhan Mantri Awas Yojana

  • Increasing Investment in the Affordable Housing Segment

2017 saw a major increase in private investments in the affordable housing category. Unlike previous years, where the majority of investments were in the luxury housing segment, 2017 saw an increase in the affordable and mid-range real-estate investments.

  • The Resurgence of the Real Estate Market

Following demonetization and GST, the Indian real-estate sector took a major hit. Incomplete projects, delayed projects, and no buyers were some of the major woes of the real estate market. Following the popularity of the PMAY, the real-estate market has improved significantly, due to the increase in demand for affordable and budget homes.

  • Creation of the RERA (Real Estate Regulatory Authority)

The RERA was formed to address grievances quickly, in all matters related to real estate. According to the Real Estate Act of 2016, all builders are required to publish all relevant details of current and ongoing projects on the official RERA website. This brings much-needed transparency to the real estate market.

  • The Significant Rise in the Number of Home Loans

For the first time in the country, the percentage of home loans touched double-digit figures in the fiscal year 2017 – 18. The housing credit grew to reach 16% in the financial year 2018, compared to 9.5% in the financial year 2017.

With home loans available at incredible subsidies, thanks to the Awas Yojana, more and more people took home loans to build their dream homes.

Some Final Thoughts

The Pradhan Mantri Awas Yojana is much more than a welfare scheme. Its impacts are far-reaching and have renewed the real-estate market dramatically. With just a few months left over before the end of the yojana, you can expect more beneficial impacts across sectors.

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