The Pradhan Mantri Awas Yojana is an extremely beneficial scheme to finally own your own home, especially to those who fulfill certain criteria. It is a central government scheme and runs until 2022.
Let us understand who benefits from the Pradhan Mantri Awas Yojana:
1) If you are in the Economically Weaker Section, whereby you earn less than Rs 3 lakhs per year, you gain by way of various subsidies.
2) If you are a slum dweller, you will stand to gain by way of private participation, ensuring a nice pucca place for yourself.
4) You will also receive interest subsidy under the scheme to avail home loans.
While economically weaker sections has been defined as those who get an income of less than Rs 3 lakhs, the definition can change, depending on the state government and with consultation of the centre.
The advantages of the Pradhan Mantri Awas Yojana
1) Housing loans
Those who have been defined as economically weak, will get an interest subsidy of as much as 6.5 per cent for a 15-year loan. This will be for loans up to Rs 6 lakhs. Any loans beyond that would be at normal market rates under the Pradhan Mantri Awas Yojana.
Interest benefits would be credited upfront into the beneficiary accounts under the scheme. The carpet area for those under the Economically weaker sections should be up to 30 square meters.
2) Assistance to build your own home
If you are in the economically weaker section of society (annual family income of less than Rs 3 lakhs), the government would offer you central assistance of Rs 1.5 lakh to build your own home. Those wanting assistance under the scheme would need to approach the Urban Local Bodies, with proof of land owned by them.
If the state governments also provide assistance, it can further reduce the cost of the home.
3) Affordable Housing Partnership
In partnership with the state, the central government would provide Rs 1.5 lakh to any house build under the scheme for such economically weaker sections.
Apart from this, the houses would be built on no profit, no losses basis, further bringing down the cost of such houses.
4) Housing for slum dwellers under Pradhan Mantri Awas Yojana
Slum development, can be taken-up for slum dwellers under the Pradhan Mantri Awas Yojana. This can be on the land owned by the central government, state government or private land. A slum rehabilitation grant of Rs 1 lakh would be provided.
Under the scheme there would be two parts: The first would be the "slum rehabilitation" part, which would provide all the housing infrastructure, including civic amenities. The other part would be where the developer would be able to sell the project to the private sector.
This would enable a cross subsidization of the project. The private sector builders so selected would be through a bidding and competitive process.
Many individuals can avail benefits under the Pradhan Mantri Awas Yojana. This is because the Economically Weaker sections have been defined as those having less than Rs 3 lakhs as annual family income. There would be millions in the country, who fall under this category.
Interestingly, for cross subsidy, the lower income group, has been defined as households whose Income is between Rs 3 lakhs to Rs 6 lakhs. Again, millions fall in this category.
Assistance to build your own home, apart from interest rate subsidy on loans is a big positive. Those who qualify should opt for the Pradhan Mantri Awas Yojana. Remember, that you should not have a home of your own, before you apply for benefits under the scheme.