The Cabinet Committee approved the Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0, a flagship project of the Narendra Modi-led administration, in a major step towards addressing the housing requirements of urban India. In order to enable 1 crore urban poor and middle-class households to build, buy, or rent affordable homes in urban areas over the course of the next five years, from 2024–2025 to 2028–2029, this ambitious project attempts to give financial support. The intention is to guarantee that every urban household that qualifies has access to a sturdy, weatherproof “pucca” housing.
Massive Financial Support for Urban Housing
Under PMAY-U 2.0, eligible families will receive substantial financial assistance to build their homes. Specifically, beneficiaries in plain areas will receive ₹1.2 lakh, while those in North Eastern and Hill States like Himachal Pradesh, Uttarakhand, and the Union Territories of Jammu & Kashmir and Ladakh will receive ₹1.3 lakh. This support is crucial in helping economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) who lack pucca houses to secure their own homes.
10 Million Homes for Urban India
The government has set an ambitious target of constructing 10 million residential units to benefit urban lower-income and middle-class households. This massive endeavor comes with a hefty price tag of ₹10 lakh crore, which includes a government subsidy of ₹2.3 lakh crore. The first phase of PMAY-U 2.0 has already seen significant progress, with 1.18 crore houses sanctioned and over 85.5 lakh homes built and handed over to beneficiaries.
Boosting Housing Loan Affordability
Additionally, the government has taken action to improve lower- to mid-income families’ access to and affordability of house loans for those from economically disadvantaged backgrounds. Offering credit risk guarantees on affordable housing loans from banks and Housing Finance Companies (HFCs), the Credit Risk Guarantee Fund Trust (CRGFT) corpus fund has grown from ₹1,000 crore to ₹3,000 crore.
Interest Subsidy Scheme for Homebuyers
To further lessen the financial strain on people wishing to buy homes, the government has launched an Interest Subsidy Scheme in addition to financial aid for home construction. A 4% interest subsidy on the first ₹8 lakh of the loan, valid for a maximum 12-year term, will be available to qualified recipients who obtain a loan of up to ₹25 lakh, with the residence valued at up to ₹35 lakh. With the maximum subsidy of ₹1.8 lakh being paid out in five-year increments, homebuyers will be greatly relieved.
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