Affordable housing is a key issue in developing countries like India. With rapid urbanization, housing for all in the urban areas is a challenge. Similarly, in the rural areas, the poor population needs funds to build permanent homes.

To facilitate rapid development of housing, Government of India, in the year 2015, launched a program – Pradhan Mantri Awas Yojana (PMAY) with a target of building 30 million affordable houses by the year 2022. 

Let us look at what is PMAY and the need for it in detail.   

What is Pradhan Mantri Awas Yojana? 

With housing recognized as one of the basic needs, governments are finding every possible way to provide housing for their citizenry. In 2007, the National Urban Housing and Habitat Policy (NUHHP) has set the objective of ‘Affordable Housing for all’ as their main focus. Additionally, the government has also set 2022 as the target year to achieve this. 

The need for affordable housing projects in India  

Housing is one of the key components of a nation’s economic well-being. As many countries try to improve their living conditions on a large scale, affordable housing (AH) has still been one of the major problems which they are taking stock of, including India. As quoted by the Economic Times,  

  1. According to the census in 2001, 72% of the population lived in rural areas and 28% in the urban areas.  
  1. By 2011, it changed to 69% in the rural population and 31% in the urban.  

There is a steady growth of people migrating to the urban areas, however, majority of the population are not being able to buy houses because of high market price. When housing isn’t provided to those who require it, there is a repercussion on the economy. Thus, affordable housing is provided for low as well as the middle income people in the rural and urban areas. As per the report of technical group on Estimation of Urban Housing Shortage (2012), there has been very few supplies of housing in both the areas.  

Affordable housing scheme in India and its structure 

Affordable housing scheme or PMAY is further divided into two major segments – one for rural and the other for urban areas. 

Pradhan Mantri Awas Yojana (Urban): 

This scheme supports three income categories: Economically Weak Sector (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) in the urban areas. As per the Ministry of Housing and Urban Affairs, by January 2019, about 69 lakhs houses were approved and 13.59 lakhs of these were completed.  

Pradhan Mantri Awas Yojana (Rural): 

This was launched in 2016 by the government of India to improve housing availability in rural areas. The target of PMAY (Rural) is to reach 1.9 crore houses by 2022. Under this scheme, by the end of January 2019, around 1.2 crore houses were constructed.  

Under both the programs mentioned above, government has constructed around 1.5 crore houses by end of January 2019. Along with these, Mumbai’s Development Plan 2034 has been approved and is aimed at providing affordable houses with extra Floor Spacing Index (FSI), a ratio of building’s total floor area to the area of the plot. Some of the other schemes which would help in contributing towards boosting the sector are Rajiv Awas Yojna, Delhi Development Authority (DDA) Housing Schemes, Tamil Nadu Housing Board Schemes (TNHB), Maharashtra Housing and Area Development Authority (MHADA) schemes and NTR Urban Housing Scheme.  

Way Forward  

Due to the rising urbanization, housing affordability and government’s policies, it is now a dream-come-true for a lot of citizens who weren’t able to get proper housing facilities. There are a lot of opportunities for private, public partnerships in affordable housing segment. Apart from an enabling ecosystem, we need robust support from the financial institutions – especially NBFC and HFC as these agencies make upto 40% of financing requirements in affordable housing segment. As India inches towards the 2022 targets of PMAY it is important to keep the focus on quality, and simplicity of process. 

To know more about how Rialtes Technologies is supporting India’s affordable housing initiatives and PMAY, join our CEO, Ajay Tyagi’s presentation at the Elets’ National Affordable Housing Summit, the first-of-its-kind virtual conference on housing and real estate in India. Visit to book your seat.