Pradhan Mantri Awas Yojana Urban – All India Radio (AIR) IAS UPSC

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  • January 16, 2020
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Pradhan Mantri Awas Yojana Urban


Search 27th Dec, 2019 Spotlight here:


General Studies 1

  • Social Issues, Urbanization, their problems & remedies

General Studies 2

  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.

In News: PMAY – Pradhan Mantri Awas Yojana: one of the world’s most ambitious and biggest housing schemes, ‘Housing For All by 2022’ announced by Prime Minister Narendra Modi in 2015, has accomplished a crossed a big milestone. It has recently expanded its scope to cater to the housing needs of the mid-income group, besides the economically weaker sections (EWS) and low-income group (LIG). It has sanctioned one crore houses under the Prime Minister Awas Yojana – Urban category and that too in a short span of four years from 2015 to 2019.

  • 1.2 crore jobs have been created so far under the scheme
  • The houses sanctioned so far under the scheme involve an investment of about ₹5.7 lakh crore with Central assistance of ₹1.6 lakh crore
  • Compared to the earlier JNNURM scheme, PMAY (U) has achieved 10 times more in a span of 4.5 years, whereas the earlier scheme had taken 10 years to achieve a significantly less number.

Under PMAY: The Government envisages building affordable pucca houses with water facility, sanitation and electricity supply round-the-clock. The scheme originally was meant to cover people in the EWS (annual income not exceeding ₹3 lakh) and LIG (annual income not exceeding ₹6 lakh) sections, but now covers the mid-income group (MIG) as well.

PMAY scheme comprises of four key aspects –

  • One, it aims to transform slum areas by building homes for slum dwellers in collaboration with private developers. 
  • Two, it plans to give a credit-linked subsidy to weaker and mid income sections on loans taken for new construction or renovation of existing homes. An interest subsidy of 3 per cent to 6.5 per cent has been announced for loans ranging between ₹6 lakh and ₹12 lakh. For those in the EWS and LIG category who wish to take a loan of up to ₹6 lakh, there is an interest subsidy (concession) of 6.5 per cent for tenure of 15 years. So far around 20,000 people have availed of loans under this scheme. This month, the Government increased the loan amount to ₹12 lakh, targeting the mid-income category. The interest subsidy on loans upto ₹12 lakh will be 3 per cent. In rural areas, interest subvention of 3 per cent is offered on loans up to ₹2 lakh for constructing new homes or extension of old homes.
  • Three, the Government will chip in with financial assistance for affordable housing projects done in partnership with States/ Union Territories for the EWS. Four, it will extend direct financial assistance of ₹1.5 lakh to EWS.


  • Low participation from private real estate development
  • Increasing construction cost on account of lack of bulk sourcing of materials
  • Unavailability of land in prime areas
  • The faulty bidding mechanism
  • The government will need another ₹1 lakh crore in three years to build one crore houses, as disbursements under PMAY-U show a huge lag. A ramp-up in fund-raising and utilisation is crucial.
  • The success of the housing schemes depends largely on how active the states and urban local bodies are. The Union government provides the funds and they are spent by the states and urban local bodies. Some states are active and some may not be very enthusiastic about it because of political reasons
  • Right now, the challenge before the government is to double the speed of construction in order to complete the remaining 6.6 million houses before March 2019. To achieve this target, the Centre has to nudge states such as Assam and Bihar, which have been lagging behind in implementing the scheme.


A) Roping in the private sector under the Public-Private Partnership (PPP) model:Among other initiatives, the government needs to

  • Grant infrastructure status to the entire real estate industry making long-term financing easy for the industry
  • Fix GST rate for all types of housing at 6%
  • Revise carpet area to 60 sq. mt including in metro cities (to qualify for subsidy)
  • Make land available at subsidized rates in metros and tier 1 cities so that the projects can be viable;
  • Reduce premium on additional FSI (floor space index) to encourage affordable housing within metro cities
  • Reduce time taken and cost of permissions and clearances
  • Work on the mass housing model, bringing economies of scale into the picture

B) Reward developers for last mile connect

  • Availability of land in cities at affordable pricing is one of the major challenges. The government could facilitate the development of affordable housing by making surplus land held by PSUs (Public Sector Undertakings) available for affordable housing projects. Also, local government’s property that is no longer useful can be monetised by selling to developers.
  • The central government should guide the states on programmes to allocate and incentivise the usage of land for affordable housing, while also incentivising state governments to facilitate engagement and implementation.
  • It is also recommended to incentivise developers for infrastructure and last mile connectivity development in semi-urban centres. It can be in the form of an increase in FSI or reduction in stamp duty or tax, and others. Infrastructure upgrading precedes the FSI increase to ensure that existing households are not adversely impacted due to the new development

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