Understanding Pradhan Mantri Awas Yojana

Understanding Pradhan Mantri Awas Yojana

Owning a house is considered as the biggest achievement for most individuals in India. For the richer section of the society it might not be a very big deal, but for the financially weaker section of society, it can be a challenge. Indian Prime Minister Narendra Modi has stepped forward and launched a program called Pradhan MantriAwasYojana. This program is categorized into two parts:

  1. Pradhan MantriAwasShehariYojana (Urban Area)
  2. Pradhan MantriGraminAwasYojana (Rural Area)

It is essential and amazing that the government acknowledges the difference between rural and urban area, and launched this program offering different features in both according to the necessity and requirement in these regions.

This program has the potential power to boost the development process, by increasing sanitation and the lifestyle of the people, by giving them an opportunity to live a solid roof that doesn’t drip or fall on their heads, whenever it rains.

What is PMAY?

PMAY aka Pradhan MantriAwasYojana is a scheme that prompts to transform the housing in the country and wants every citizen in the country to live in a Pucca (well constructed) house.

The program was launched in 2015, with a vision to provide sanitary housing conditions in all parts of India in 2022, giving a reason to country celebrate its 75 years of independence.

PMAY and Credit Linked Subsidy Scheme (CLSS)

It is a scheme launched under PMAY program in which banks that fall under the program offer interest subsidy to the economically weaker section of our society on Housing loan for purchasing/ constructing/ improvement and extension in their homes. This includes Lower Income Groups (LIG) as well as Middle Income Group (MIG).

Housing Loan usually has a high-interest rate, by putting out subsidiary not only are these banks promoting people to take loans but are also raising the overall housing standards in the country.

Eligibility Criteria

  • The beneficiary families applying for this loan shouldn’t fall under the ‘Housing for all by 2022’ Mission by Central Government.
  • Any nuclear family under the category of an economically weaker section, Middle-income group, and lower income group are eligible to apply and get a CLSS from any bank that comes under the Pradhan MantriAwasYojana.
  • It is mandatory for people under the economically weak section and low-income group to name the new house or house under construction in the name of the female member of the family or at least as the co-owner of the household to avail this scheme.
  • It is mandatory for the beneficiary family to provide their Aadhaar number under MIG Category.


  • This scheme is applicable for nuclear families, comprising of a husband, wife and unmarried kids.

Note: An Adult earning member of the family irrespective of his/her marital status is seen as a separate part of household under the MIG category.

  • The family or any member of the family should not own a house (Pucca House), under his/her name, in any part of the country.

 Features of CLSS

  • People will get upfront interest subsidy benefits on the principal outstanding.
  • There is no set cap limit on the amount of the loan or the cost of property selected by the applicant.
  • Interest subsidy will be applicable on maximum tenure period of 20 years over the loan.
  • The NPV (Net Present Value) of the loan’s interest subsidy is going to be calculated with a 9% discount rate.
  • Applicants can also apply for other loans; however, these loans will be repaid by them at a non-subsidized rate.


Indians have been blessed a Prime Minister, who has a keen eye for development with amazing vision and foresight. We hope that he is able to transform the country, in his due time. You can already see results in the country, as more and more people coming to banks to avail this benefit and to build a house that actually has the strength to act like a shelter and protect them against all miscellaneous dangers. Using this scheme the financially weak section of the society can gain subsidy benefits over Rs 2.67 Lakh, under the Pradhan MantriAwasYojana.

Hopefully, PMAY will reconstruct the structure of creating housing, in a more advanced and modern way. And cities will be able to stay clean and sanitized without slum areas.

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