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Everything You Should Know About PMAY (Pradhan Mantri Awas Yojana)

PMAY or Pradhan Mantri Awas Yojana was implemented in the year 2015 with the sole purpose of providing ‘housing to all’. The main proposition of this scheme is to build 22 crore houses by the year 2022 in both rural and urban India. Not only that, it also focuses on keeping it affordable such that every member of the society is in a position to own a house. With a unique initiative as this, applying for home loans has become a preferred choice for the economically weaker sections of the society. But is that all? Absolutely not! There is more to PMAY and here is all that you need to know about it.

Fact #1

PMAY not only speaks of providing affordable houses to all, but also talks about the use of environment friendly building material. This is with regards to both, PMAY Urban and PMAY Gramin/Rural.  The cost of the houses, in case of MIG, will be under Rs. 65 lakhs in metros, and under Rs. 50 lakhs, in others.

Fact #2

The scheme gives a 6.5 per cent subsidy on the interest of home loans for a period of 20 years. Not only that it states that senior citizens and specially-abled must be provided with the ground floor space only. It has also taken a progressive step by making the registration of both, male and female heads compulsory.

Fact #3

There are certain rules that apply to the application and eligibility. There are three schemes: Economically Weaker Section or the Lower Income Group, Middle Income Group I and Middle Income Group II. You can apply online and offline, the details of which are given in the official website.

Fact #4

It is to be noted that the Pradhan Mantri Awas Yojana is not applicable in every rural or urban area. The government has chosen about 4304 cities that lie in the purview of this scheme, the list of which is easily available in the official website.

Fact #5

A lot of people from the higher income groups will wonder why they should be interested in this scheme. There is always a ripple effect. Firstly, there is a direct link between the scheme and industries like steel, cement, bricks, etc. They are likely to witness a growth thus impacting the capital market. Further, this scheme will give a boost to the banks by facilitating loan growth. This is particularly of great benefit for the investors.

Fact #6

PMAY has introduced a concept called CLSS or Credit Linked Subsidy Scheme. This is in relation to those loans that have been raised for construction, improvement or development of the existing houses. The eligibility criterion for this is: first, the individual must not have a pucca house under his/her name or under a family member’s name, second, in case of a couple, either one or both will be eligible for one subsidy and lastly, the individual must not have availed any form of central assistance under any housing scheme from either the PMAY or the Government.

Fact #7

An individual who is purchasing a house for the first time will be required to pay 8 per cent GST, provided they apply for a home loan via the CLSS under PMAY.

With this huge step taken by the government, we hope that every individual in this country lives and flourishes in a house that not only makes them happy but also helps improve their standard of living. Apply for a home loan under the PMAY scheme in Kotak Mahindra Bank, and give wings to your dreams!

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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