On June 1st, 2015, the Indian government rolled out the Pradhan Mantri Awas Yojana (PMAY) to provide affordable housing for all by 2020. There are two parts to this scheme– Pradhan Mantri Awas Yojana Gramin (PMAY-G) and Pradhan Mantri Awas Yojana Urban (PMAY-U) that aim to provide “pucca” housing for the rural population and city or town housing for the urban population.
Impact on the Indian Economy
In India, the real estate sector contributes a significant percentage to the GDP. After the announcement of PMAY in 2015, a growth of 27% was recorded in the affordable housing segment. Presently, several citizens are leveraging PMAY schemes for house financing; whether it is subsidized home loan interest ratefor easy loan servicing or tax deductions.
Through the PMAY boost, Indian economy hasexperienced a significant pushbecause of the enhanced sales in the affordable housing category. As of January 2020, the number of finished houses increased four times from 11.95 lakhs in 2014-15 to 47.33 lakhs under the PMAY-G scheme.According toEconomic Survey 2020, about 1.03 crore houses have been approved while 60 lakh houses are under construction,of which, around 32 lakh houses have been completed and delivered.
Under PMAY-U, as of December 2019, 1.12 crore houses were sanctioned in the urban areas, and the process has resulted in the creation of 1.2 crore jobs. Furthermore, NSDC has predicted that the real estate and construction sector will generate employment for about 76.5 million workers, in affordable housing by 2022. Thus, the PMAY advantages are deemed to fetch higher ROIs in the real estate sector and bring a positive impact on the economy.
Current Changes in the PMAY Scheme
In the wake of COVID-19, the credit-linked subsidy scheme (CLSS) under PMAY for MIGs has received extensiontill March 2021. Thus, eligible beneficiaries shouldavail the benefits of subsidised interests on home loan before that.
Also, a scheme for Affordable Rental Housing Complexes (ARHC) has recently been launched through public-private ownership. Under this scheme, vacant government housing complexes are converted and leased out to the urban poor at concessional rates, to keep the migrant workers from returning to their native place.
For phase-II, i.e. 2019-20 to 2021-22, a target of 1.95 crore houses is set under the PMAY-G scheme, of which, 5, 27,878 homes were delivered.
Many Indian citizens, from the EWS, LIG, and MIG categories, have realised their dreams of homeownership through the PMAY advantages. In 2019 alone, about 2.61 lakh housing units were sold across seven major cities in India. Additionally, the PMAY scheme extension until FY21 is expected to benefit 2.5 lakh beneficiaries in the future.
Overall, the impact of PM Awas Yojana on the economy has been positive due to its inter-sectional linkages. Best of all, the PMAY scheme has promoted inclusiveness by encouraging homeownership among social groups like construction workers, domestic workers, transgender, senior citizens, women, etc.