The Union Cabinet has approved the Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0, a significant housing initiative aimed at providing financial assistance to one crore urban poor and middle-class families.
As reported by the Hindustan Times, the scheme, with a budget of ₹2.30 lakh crore, will facilitate the construction, purchase, or rental of affordable housing in urban areas over the next five years.
PMAY-U 2.0 is a continuation of the government’s flagship housing program, backed by an impressive ₹10 lakh crore investment. Of this, ₹2.30 lakh crore is dedicated to direct financial assistance. The first phase of PMAY-U saw 1.18 crore houses sanctioned, with over 85.5 lakh homes already constructed and delivered to beneficiaries. The scheme aims to further the goal of providing all-weather ‘pucca’ houses to eligible families in urban areas.
A major feature of PMAY-U 2.0 is the Interest Subsidy Scheme, designed to make home loans more affordable for families in economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG). Beneficiaries taking loans up to ₹25 lakh for house values up to ₹35 lakh are eligible for a 4% interest subsidy on the first ₹8 lakh of the loan for a tenure of up to 12 years. The maximum subsidy amount of ₹1.80 lakh will be provided to eligible beneficiaries in five annual installments.
Under PMAY-U 2.0, EWS households, defined as families with an annual income of up to ₹3 lakh, LIG households with an income between ₹3 lakh and ₹6 lakh, and MIG households earning between ₹6 lakh and ₹9 lakh, are eligible for assistance. The scheme’s primary objective is to ensure these groups have access to affordable housing, either through construction or purchase.
The Affordable Housing in Partnership (AHP) component of the scheme emphasizes collaboration between states, Union Territories (UTs), Urban Local Bodies (ULBs), and private developers. The government will offer a Technology Innovation Grant (TIG) of ₹1,000 per square meter to incentivize the use of modern construction technologies in AHP projects. Additionally, beneficiaries will receive redeemable housing vouchers for purchasing homes in private sector projects that comply with government norms.
To streamline access to the subsidies, the government has ensured that beneficiaries can manage their accounts and subsidy applications through a dedicated website, using one-time passwords (OTPs) or smart cards. This move is part of the broader digital push under the Prime Minister’s vision for PMAY-U 2.0.
Recognizing the diverse housing needs of urban populations, the scheme introduces an Affordable Rental Housing (ARH) vertical. This segment targets working women, industrial workers, urban migrants, students, and other vulnerable groups who need temporary housing solutions. The ARH initiative aims to provide affordable and hygienic living spaces for those who do not wish to own a home or cannot afford to buy one.
The PMAY-U 2.0 is part of the government’s broader strategy to ensure housing for all citizens. The initiative, with its comprehensive approach to both homeownership and rental housing, is expected to significantly impact the urban housing landscape, offering millions of families the opportunity to secure safe and affordable living conditions.
This approval by the Union Cabinet, chaired by Prime Minister Narendra Modi, underscores the government’s ongoing commitment to addressing the housing needs of India’s urban poor and middle-class families, ensuring they have access to dignified and sustainable living environments.