PMAY Gramin vs PMAY Urban - Know all About Them

The Government of India launched its flagship program, the Pradhan Mantri Awas Yojana (PMAY), in June 2015 to uplift the living standards of all sections of society. The core objective of the scheme is to ensure pucca homes equipped with basic amenities such as water supply, sanitary conditions, and round-the-clock electricity are accessible for all eligible beneficiaries by the year 2022.The housing scheme that caters to the urban and rural population of the country has been classified into two categories, namely PMAY-Gramin (PMAY-G) and PMAY-Urban (PMAY-U). Though the basic aim of both (PMAY-U & PMAY-G) is to help people fulfil their dream of homeownership, they are distinct entities with well-defined features.Let's take a closer look at the two components of the PMAY social welfare program to understand the key differences between them.

The focus of the PMAY-U scheme is to address the housing needs of the urban poor, including slum dwellers, through 4 main verticals depending on their income, finances, and more. These include the following:

1. Rehabilitation of slum dwellers in collaboration with private construction developers
2. Affordable housing under the public-private partnership (PPP) model
3. Subsidised individual house construction/enhancement
4. Credit linked subsidy scheme (CLSS) for economically weaker sections

• Beneficiaries Families belonging to the economically weaker sections (EWS), low-income groups (LIGs), and middle-income groups (MIGs) are classified as the beneficiaries under the PMAY-U scheme.
• Online and Offline Application A potential beneficiary can register for the PMAY-U scheme either online or offline.
• Area Restrictions The carpet area of the dwelling unit under PMAY-U is 30 sq. meters for EWS families, 60 sq. m for LIG, 160 square meters for MIG-1, and 200 square meters for MIG-2 categories.
• Income Restrictions The annual income limit is up to Rs. 3 lakhs for EWS, Rs 3-6 lakhs for LIG, Rs. 6-12 lakhs for MIG-I, and Rs. 12-18 lakhs for MIG-II.
• Benefits for EWS, LIG and MIG EWS beneficiaries are entitled to financial assistance in all four verticals, whereas LIG and MIG categories are authorised for aid only under the Credit Linked Subsidy Scheme (CLSS) .
• Exemptions The beneficiary, including his spouse, parents, or unmarried children owning a pucca house, cannot avail of PMAY-U assistance.

The PMAY-G was previously known as the Indira Awaas Yojana. The centrally sponsored social welfare scheme has a single point vertical to improve housing infrastructure in rural areas by providing low-cost housing units for families currently living in kutcha or dilapidated homes. The target is to construct budget homes featuring all basic amenities for poor people living in underdeveloped villages across the country.

• Cost of Building to Be Shared between Central and State Governments Under this scheme, the central government and the respective state governments will share the total cost of developing residential units in the ratio of 60:40 for plain regions and 90:10 for hilly regions. Constructions in union territories will be funded by the central government.
• Minimum Requirements The minimum size of the house under PMAY-G is 25 sq. meters that include a power supply and hygienic cooking space.
• Selection by the Gram Sabhas There is no application form for registration under the PMAY-G scheme. Instead, beneficiaries are selected by the Gram Sabhas based on the data gathered by the national Socio-Economic and Caste Census (SECC) in 2011. This is to speed up the application process and maintain transparency.
• Financial Aid Names of beneficiaries shortlisted by Gram Sabha are eligible for benefits under the PMAY-G scheme. They can avail of a loan of up to Rs 70,000 from lending institutions to construct the house and get financial aid of up to Rs 2 lakh for maintenance or enhancement of homes. Such home loans will also get an interest subsidy of three per cent.
• Process oof Benefit Transfer The funds are electronically transferred under Direct Benefit Transfer (DTB) mechanism to the beneficiary's bank or post bank accounts after Aadhar verification.
• Eligibility The applicants must belong to EWS or LIG or BPL (Below the Poverty Line) category, and their family's annual income should be between Rs.3-6 lakhs.

As is evident, the rural and urban components of the PMAY differ on several operational and financial aspects. But the basic objective of the social welfare schemes is the same. Both modules are designed to serve the common purpose of providing affordable housing facilities to the low-income and economically weaker sections of the nation. The reason for splitting the housing program into two parts is primarily to ensure that each sector (rural & urban) receives concentrated attention and responsibility to fulfil the mission of "Housing for All" by 2022.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.