Jul 28

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Affordable housing scheme in India

The biggest dream of everyone here in India is to own a house. Owning a home is pride, and for some, it is a need. But still, half of the population is hunting for an own residence. On having the report, the Government proposed a solid Idea – The “Affordable housing scheme” to bring affordable homes for the low-income group in India.
As India has many numbers of low and middle group people, who cannot afford to buy their own home. Under the launch of the Affordable housing  scheme by the government, people are getting the shelter – being the third most important necessity after food and clothes.

Affordable housing schemes in India

1. Pradhan Mantri Awas Yojana (PMAY): 2015

PMAY is an NDA government’s flagship Affordable housing scheme implementing in between 2015-2022, aiming for ‘Housing For All’. This scheme is divided into 4 parts


(a) In-situ slum redevelopment (ISSR):

Under this scheme the government uses the land of the slum dweller to make a house for them. The scheme has leveraged by the large number of slum area in India. With the private partnership with the eligible slum dweller, the government can use to develop their slum land to make affordable houses.

(b) Credit-linked subsidy scheme (CLSS): 

Under this scheme, Credit-linked subsidy will be provided to the EWS Economically Weaker Section (EWS) and Low Income Group (LIG) on Home loans. The subsidy is provided on both for buying or constructing of house to the urban poor

  • EWS with the annual Household Income Up to Rs.3 lakh/annum and house sizes upto the carpet area of 30 sq.m. Upto loan amount 6 lakh at 6.5 interest subsidy.
  • LIG with the annual Household Income from 3 lakh to Rs. 6 lakh/annum and house size upto the carpet area of 60 sq.m. Upto loan amount 6 lakh at 6.5 interest subsidy.

(c) Affordable housing in partnership (AHP):

Under this scheme, Affordable house are provided to the EWS groups with financial assistance from with different partnerships by States/UTs/Cities with the private sector. Each EWS house gets Rs. 1.5 Lakh Central Assistance when at least 35% of the total constructed houses are for EWS category.

(d) Subsidy for Beneficiary-led individual house construction/enhancement. 

Under this scheme, a subsidy is provided to EWS category people to construct or renovate their existing houses. Assistance of ₹ 1.5 lakh per family is provided for new construction.


2. Rajiv Awas Yojna: (2011)

Rajiv Awas Yojana (RAY) is an affordable housing scheme announced in 2009 aiming for a “Slum Free India”.This affordable housing scheme includes:

a. The slum properties are used to make apartments for the slum land owner.
b. Encourages the state and union territories (UT) to bring all illegal constructions within a formal system.
c. Affordable housing in partnership (AHP) with the States & UTs. Each EWS house gets Rs. 75,000 Central Assistance for house sizes upto the carpet area of 21 to 40 sq.m when at least 250 dwelling units of the total construction project.


3. Interest Subsidy for Housing the Urban Poor (ISHUP): 2009

This scheme mandates subsidy of 5% p.a in interest on housing loans upto Rs. 1.00 lakh loan amount to the EWS and LIG as part of credit.

Under this affordable housing scheme, the Minister for Housing and Urban Poverty included the Regional Rural Banks (RRBs), Private & public sector Banks and Self Help Groups (SHGs) for expanding credit flow to the housing sector.

This scheme also encourages the poor sections (EWS & LIG) to avail for housing loan facilities.


4. National Urban Housing & Habitat Policy: (2007)

The core focus of this Policy is supply of “Affordable Housing For All” with special emphasis on low income sections of society such the urban poor, SC/ST, BC and Minorities.

It promotes and accelerates the development of cost-effective & quality approved building by the use of modern technologies. And special Provision given to Women to own a house.


5. Jawaharlal Nehru National Urban Renewal Mission (JNNURM): 2005

JNNURM is a city modernisation scheme has two components

  1. Basic Services for Urban poor (BSUP)
  2. Integrated Housing and Slum Development Programme (IHSDP): development of slums by providing affordable houses with basic amenities

There are many real estate company making affordable apartments in Chennai for encouraging the middle class group to buy their own house.

The Central government is coming up with so many affordable housing schemes to balance the demand and supply of the houses. Apart from that, many State Governments like Tamil Nadu, Andhra Pradesh, and Gujarat etc are also encouraging EWS, low and middle income groups to afford houses either by loan subsidy, rental benefits or by constructing affordable houses.