Pradhan Mantri Awas Yojana 2017 (PMAY) Guidelines
Considering the present estimation, it cannot be denied that the urban population of our country has observed an immense change and advancement in their lifestyle. And with the PM Awas Yojana, it is yet to receive another phenomenal growth in forthcoming years. According to reports, there will be an increase of 400 million people from the current level and the biggest challenge will be offering proper residential areas, sanitation, a safe environment and development for the city dwellers. Presently the development within a city is handled by the real estate developers and those individuals decide which areas need development.
This scheme is divided into 2 important parts
The aim of Awas Yojana
- The price of real estate markets have skyrocketed in the present scenario and that leaves a common man with only dreams of buying plots or houses. And for addressing these issues, the PM Awas Yojana has been developed for ensuring that the individuals residing in urban areas are provided with a proper house of their own.
- The aim of this scheme is providing shelter to those who are homeless and the primary focus shall be towards those who fall into the category of LIG, EWS andMIG. The Awas Yojana has been formatted in different segments for the different time periods. And different parts of the country shall be included in the Awas Yojana at different segments.
The beneficial aspects of Awas Yojana:
- There has been the announcement of subsidy for those individuals who are among the scheduled cast, tribe or other economically backward classes. And the beneficiaries of this scheme shall have a subsidy amount of 1 Lakh to 2.3 Lakh.
- During the allotment of housing, priority shall be given to handicapped individuals and senior citizens. Endeavor shall be on providing rooms for the handicapped and senior citizens at ground floors, so that it becomes really easy for them in future.
- For the duration of twenty years, there will be a subsidy of interest within housing loan and it will be offered to all the beneficiaries. There will be the inclusion of durable eco-friendly technologies to make the houses stable and long lasting.
Other important factors:
- To be eligible for receiving this scheme, the individual or beneficiary should not own any “pucca” house. This scheme is going to support the housing construction up to some carpeted area along with a proper civic infrastructure.
- The houses developed in this scheme shall be designed with the proper requirements for safety to deal with earthquakes, cyclone, flood, landslides etc. For registration of this scheme, it is important to include the name of spouse or mother. The newly allotted house shall be either in the name of the male family head or it could include both the names of male and female family heads.
The Central Government of India will transfer Rs. 1.30 Lakh crore within the next three years under this scheme. The funds will be transferred directly to the bank account of the beneficiaries.
The Indian Government introduced this scheme to help the citizens of India especially the homeless citizens. Thus, 60 percent of the total houses will be built for the homeless citizens and the citizens who belong to the SC and ST communities.
Summary of Fund Transfer
|Fund Transfer Start Month||September 2016|
|Number of Cities||2508|
|Number of Districts||26|
|Amount of Fund||Rs. 1.30 lakh crore|
|Number of Houses||1 crore|
|Number of Masons||30, 000|
Selection and Validation
The Indian government has already selected and validated the beneficiaries under this scheme. The Indian government has selected 2508 cities across 26 states under Pradhan Mantri Awas Yojana.
Direct Benefit Transfer (DBT)
Pradhan Mantri Awas Yojana will be operating on Direct Bank Transfer so that the transparency of the scheme is maintained. The funds will be transferred directly to the bank account of the beneficiaries in installments over a period of three years. The Indian government will start transferring the money from September. For checking the diversion of funds and transparency, the government will do geo-tagging of all the homes under PM Awas Yojana. The government has provided training to 30,000 masons for constructing homes. The government has also finalized the designs for each geography.
Changes in – Interests and Subsidies for 2017
One of the most ambitious projects undertaken by the current Union Government is – Housing for All by 2022. The scheme started back in 2015 but on New Year’s Eve, 2016, PM Modi made some interesting announcements and brought in some important additions to the PMAY. Newly identified target groups with new sanctioned loan amount were the basic announcement. What was really important about the announcement was the clarification of identification of new target groups and coming up with loan options for them. Previously, the scheme was designed for EWS (Economically Weaker Sections), LIG (Low Income Group) and Women. Now, the government has included MIG or Middle Income Group.
This declaration of PM Modi gave relief to many people and it is expected that more and more people will be opting for home loans under this grand scheme. Let us take a comparative look at the previous scheme and the new announcement and find out how the new parameters will impact people.
Comparative Look at PMAY 2015 and New Announcements for 2017
|Parameters||Scheme as in 2015||Additions to Scheme for 2017|
|Amount of loan to be granted, which will be eligible for subsidy||No more than 6 lakhs||No more than 9 lakhs||No more than 12 lakhs|
|Who will be eligible||EWS people who earn no more than 3 lakhs in a year? LIG people who earn no more than 6 lakhs in a year. Women to get first preference and to become co-owner||Middle Income Group has been included but no official word has been declared so far when it comes to defining the income for MIG people|
|Loan tenure for subsidy calculation||15 years||20 years||20 years|
|Subsidy to be provided||6.5% on interest||4% on interest||3% on interest|
|Actual subsidy amount||For loan up to 6 lakhs, subsidy will be INR 2.2 lakhs||For loan up to 9 lakhs, subsidy will be INR 1.94 lakhs||For loan up to 12 lakhs, subsidy will be INR 1.91 lakhs|
|Loan amount||INR 12 lakhs (we assume that a person actually takes a loan of that amount)||INR 9 lakhs||INR 12 lakhs|
|Amount that will be actually eligible for subsidy on interest||INR 6 lakhs||INR 9 lakhs||INR 12 lakhs|
|Rate of subsidy||6.5%||4%||3%|
|Subsidy amount to be provided||INR 2.2 lakhs||INR 1.94 lakhs||INR 1.91 lakhs|
|EMI for 15 years if subsidy is not included||INR 13,264||INR 9,128||INR 11,817|
|EMI for 15 years if subsidy is included||INR 10,428||INR 7,117||INR 9,931|
As we see from the table above, the new MIG groups which have been identified under the PMAY are expected to increase the participation of more and more potential home buyers. This move was possibly taken by the government to give a major push to the scheme. The MIG groups identified under the scheme cover neo-MIG in rural sectors of India. This will allow penetration of the scheme in the rural areas where many people still do not have a house of their own.