The Government of India is set to revamp the Pradhan Mantri Awas Yojana (PMAY) in urban areas with significant changes. The upcoming phase of PMAY (U) is poised to reduce the income threshold for middle-income group (MIG) beneficiaries from INR 18 lakh to INR 10 lakh.
This adjustment is designed to better channel subsidies towards those who need them most, aligning with the government’s commitment to prudent fiscal management and enhanced housing accessibility. Under the proposed reforms, the disbursement of subsidies will also undergo modification, spanning over a five-year period instead of a one-time payment. This restructuring aims to ensure improved monitoring and utilization of funds, thereby preventing misuse and enhancing transparency in subsidy distribution. The proposals are slated for discussion and approval by the Cabinet following a recent presentation to Prime Minister Modi.
Sources familiar with the matter have indicated that the interest subsidy for MIG beneficiaries is expected to hover around INR 2.6 lakh, akin to the previous phase of the scheme. The financial allocations for these initiatives are anticipated to be unveiled as part of the upcoming budget presentation, highlighting the government’s continued commitment to affordable housing solutions. Previously categorized into two income brackets of INR 6 lakh to INR 12 lakh and INR 12 lakh to INR 18 lakh, the MIG segment may now be consolidated into a single category to streamline administrative processes and ensure more equitable distribution of benefits.
The revised scheme aims to implement lessons learned from previous phases, focusing on providing substantial relief in bank loan interest to families residing in rented accommodations, unauthorized colonies, and slums. This initiative aligns closely with Prime Minister Narendra Modi’s vision to empower urban dwellers by enabling them to build their own homes. The revamped PMAY (U) 2.0 envisages the provision of financial assistance for three crore houses over the next five years, encompassing both rural and urban areas. The scheme will continue to offer various components including beneficiary-led construction, in-situ slum rehabilitation, and the credit-linked subsidy scheme (CLSS), with eligible beneficiaries potentially receiving up to INR 1.5 lakh in assistance.
