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Cabinet approves Pradhan Mantri Awas Yojana-Urban 2.0 Scheme

Published By : Admin | August 9, 2024 | 22:22 IST
Cabinet approves Pradhan Mantri Awas Yojana-Urban 2.0 Scheme
1 crore houses to be constructed for urban poor and middle-class families
Investment of ₹ 10 lakh crore and Government Subsidy of 2.30 lakh crore under PMAY-U 2.0

The Union Cabinet, chaired by Hon’ble Prime Minister Shri Narendra Modi, today approved Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0under which financial assistance will be provided to 1 crore urban poor and middle-class families through States/Union Territories (UTs)/PLIs to construct, purchase or rent a house at an affordable cost in urban areas in 5 years. The Government Assistance of ₹ 2.30 lakh crore will be provided under the Scheme.

PMAY-U is one of the major flagship programmes being implemented by Government of India to provide all-weather pucca houses to all eligible beneficiaries in the urban areas. Under PMAY-U, 1.18 crore houses have been sanctioned while more than 85.5 lakh houses have already been constructed and delivered to the beneficiaries.

Hon’ble Prime Minister in his Independence Day speech on 15th August 2023 from the ramparts of Red Fort had announced that Government of India will come up with a new scheme for the coming years to provide benefit to weaker section and middle-class families in owning a house.

The Union Cabinet on 10thJune 2024 resolved to provide assistance to 3 crore additional rural and urban households for the construction of houses, to meet the housing requirements arising out of the increase in the number of eligible families.In pursuance of the Hon’ble Prime Minister’s vision, PMAY-U 2.0, with an investment of ₹ 10 lakh crore, will address the housing needs of one crore families, ensuring that every citizen leads a better quality of life.

In addition, the corpus fund of Credit Risk Guarantee Fund Trust (CRGFT) has been increased from ₹1,000 crore to ₹3,000 crore to provide benefit of credit risk guarantee on affordable housing loans from Banks/Housing Finance Companies (HFCs)/Primary Lending Institutions (PLIs) to Economically Weaker Section (EWS)/Low Income Group(LIG) segments for construction/purchase of their first home. Further Management of Credit Risk Guarantee Fund will be transferred to National Credit Guarantee Company (NCGTC) from National Housing Bank (NHB). Credit Risk Guarantee Fund Scheme is being restructured and modified guidelines will be issued by Ministry of Housing & Urban Affairs (MoHUA).

PMAY-U 2.0 Eligibility Criteria

Families belonging to EWS/LIG/Middle Income Group (MIG) segments having no pucca house anywhere in the country are eligible to purchase or construct a house under PMAY-U 2.0.

  • EWS households are families with an annual income up to ₹3 lakh.

  • LIG households are families with an annual income from ₹3 lakh up to ₹6 lakh.

  • MIG households are families with an annual income from ₹6 lakh up to ₹9 lakh.

Coverage of the Scheme

All statutory towns as per Census 2011 and towns notified subsequently, including Notified Planning Areas, Areas falling within Notified Planning/Development area under the jurisdiction of Industrial Development Authority/Special Area Development Authority/Urban Development Authority or any such Authority under State legislation which is entrusted with the functions of urban planning and regulations shall also be included for the coverage under PMAY-U 2.0.

PMAY-U 2.0 components

The Scheme seeks to address the affordable housing requirement in urban areas through following verticals:

  1. Beneficiary-Led Construction (BLC): Under this vertical, financial assistance will be provided to individual eligible families belonging to EWS categories to construct new houses on their own available vacant land. In case of landless beneficiaries, land rights (pattas)may be provided by States/UTs.

 

  1. Affordable Housing in Partnership (AHP): Under AHP, financial assistance will be provided to EWS beneficiaries for owning houses being built with different partnerships by States/UTs/ Cities/Public/Private agencies.

 

  • Redeemable Housing Vouchers will be given to beneficiaries who purchase house from private projects.States/UTs/ULB shall whitelist the private sector projects complying with all the necessary norms

  • An additional Grant in the form of Technology Innovation Grant (TIG) @₹1000 per sqm/unit shall be provided to AHP Projects using innovative construction technologies

 

  1. Affordable Rental Housing (ARH): This vertical will create adequate rental housing for working women/industrial workers/ urban migrants/homeless/destitute /studentsand other eligible beneficiaries. ARH shall ensure affordable and hygienic living spaces for urban dwellers who do not want to own a house but require housing for short term basis or those who do not have the financial capability to construct/buy a house.

 

This vertical will be implemented through two models as under:

  • Model-1: Utilizing existing Government funded vacant houses in cities by converting them into ARH under Public Private Partnership mode or by public agencies.

  • Model-2: Construct, Operate and Maintain rental housing by Private/Public agencies

For projects constructed using innovative technologies, TIG at the rate of ₹3,000 per sqm shall be released by Central Government while State/UT Government shall provide ₹2000/ per sqm as part of State Share.

iv. Interest Subsidy Scheme (ISS): The ISS vertical will provide benefits of subsidy on home loans for EWS/LIG and MIG families. Beneficiaries taking loan up to ₹25 lakh with house value up to 35 lakh will be eligible for 4 percent interest subsidy on first ₹8 lakh loan up to 12 years tenure. A maximum of ₹1.80 lakh subsidy will be given to eligible beneficiaries in 5-yearly instalmentsthrough push button. Beneficiaries can access their accounts through website, OTP or smart cards.

PMAY-U 2.0 will be implemented as Centrally Sponsored Scheme (CSS), except for the Interest Subsidy Scheme (ISS) component, which will be implemented as Central Sector Scheme.

Funding Mechanism

The cost of house construction under different verticals, except for ISS, shall be shared among Ministry, State/UT/ULB and identified eligible beneficiaries.TheGovernment Assistance in AHP/BLC verticals under PMAY-U 2.0 will be ₹2.50 lakh per unit. State/UT share shall be mandatory under the Scheme. For UTs without legislature, Central: State sharing pattern will be 100:0, For UTs with legislature (UT of Delhi, J&K and Puducherry), North-Eastern States and Himalayan States (Himachal Pradesh and Uttarakhand) sharing pattern will be 90:10 and for other states sharing pattern will be 60:40.  To improve affordability of houses, States/UTs and ULBs may give additional assistance to beneficiaries.

Under ISS vertical, Central Assistance up to ₹1.80 lakh subsidy will be given to eligible beneficiaries in 5-yearly instalments

 Detailed sharing patten is as below.

S. No.

 

States/UTs

PMAY-U 2.0 Verticals

BLC & AHP

ARH

ISS

  1.  

North-Eastern Region States, Himachal Pradesh, Uttarakhand and Union Territory (UT) of J&K, Puducherry and Delhi

Central Govt.- ₹2.25 lakh per unit

State Govt.- Min. ₹0.25 lakh per unit

 

Technology Innovation Grant

 

GoI: ₹3,000/Sqm per unit

 

State Share: ₹2,000/Sqm per unit

Home Loan Subsidy – up to ₹1.80 lakh (Actual Release) per unit by Government of India as Central Sector Scheme

 

  1.  

All other UTs

Central Govt. - ₹2.50 lakh per unit

  1.  

Remaining States

Central Govt. - ₹1.50 lakh per unit

State Govt.- Min. ₹1.00 lakh per unit

Notes:

  1. State/UT share shall be mandatory under PMAY-U 2.0.  Apart from the minimum State Share, the State Governments may also provide additional top-up share to increase the affordability.

  2. In addition to Central Assistance, MoHUA will provide Technology Innovation Grant (TIG) only to the AHP projects using innovative building materials, technologies & processes @ ₹1,000 per sqm upto 30 sqm per dwelling unit to the implementing agencies to offset the impact of any additional cost implication under AHP projects. 

 

Technology & Innovation Sub-Mission (TISM)

TISM will be set up under PMAY-U 2.0 to guide and facilitate States/UTs and other stakeholdersin adoption of modern, innovative and green technologies and building material for faster and quality construction of houses. Under TISM, States/UTs/Cities will be assisted through innovative practices and projects in challenge mode focused on disaster resistant and environment friendly technologies for climate smart buildings and resilient housing.

Affordable Housing Policy

In order to seek benefit under PMAY-U 2.0, States/UTs will have to formulate “Affordable Housing Policy” containing various reforms and incentives for ensuring active participation of Public/Private entities and promote Affordable Housing Ecosystem. ‘Affordable Housing Policy’ will include such reforms which will improve the affordability of ‘Affordable Housing’.

Impact:

PMAY-U 2.0 will achieve the vision of ‘Housing for All’ by fulfilling the housing dreams of EWS/LIG and MIG segments. The Scheme will also ensure equity across different segments of population by addressing the requirement of slum dwellers, SC/STs, minorities, widows, Persons with Disabilities and other underprivileged sections of the society. Special focus will be given to Safai Karmi, street vendors identified under PMSVANidhi Scheme and different artisans under Pradhan Mantri-Vishwakarma Scheme, anganwadi workers, building and other construction workers, residents of slums/chawls and other groups identified during operation of PMAY-U 2.0.

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Prime Minister Narendra Modi addressed the 5th National Conference of Chief Secretaries in Delhi, earlier today. The three-day Conference was held in Pusa, Delhi from 26 to 28 December, 2025.

Prime Minister observed that this conference marks another decisive step in strengthening the spirit of cooperative federalism and deepening Centre-State partnership to achieve the vision of Viksit Bharat.

Prime Minister emphasised that Human Capital comprising knowledge, skills, health and capabilities is the fundamental driver of economic growth and social progress and must be developed through a coordinated Whole-of-Government approach.

The Conference included discussions around the overarching theme of ‘Human Capital for Viksit Bharat’. Highlighting India's demographic advantage, the Prime Minister stated that nearly 70 percent of the population is in the working-age group, creating a unique historical opportunity which, when combined with economic progress, can significantly accelerate India's journey towards Viksit Bharat.

Prime Minister said that India has boarded the “Reform Express”, driven primarily by the strength of its young population, and empowering this demographic remains the government’s key priority. Prime Minister noted that the Conference is being held at a time when the country is witnessing next-generation reforms and moving steadily towards becoming a major global economic power.

He further observed that Viksit Bharat is synonymous with quality and excellence and urged all stakeholders to move beyond average outcomes. Emphasising quality in governance, service delivery and manufacturing, the Prime Minister stated that the label "Made in India' must become a symbol of excellence and global competitiveness.

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Prime Minister emphasised the need to map skill demand at the State and global levels to better design skill development strategies. In higher education too, he suggested that there is a need for academia and industry to work together to create high quality talent.

For livelihoods of youth, Prime Minister observed that tourism can play a huge role. He highlighted that India has a rich heritage and history with a potential to be among the top global tourist destinations. He urged the States to prepare a roadmap for creating at least one global level tourist destination and nourishing an entire tourist ecosystem.

PM Modi said that it is important to align the Indian national sports calendar with the global sports calendar. India is working to host the 2036 Olympics. India needs to prepare infrastructure and sports ecosystem at par with global standards. He observed that young kids should be identified, nurtured and trained to compete at that time. He urged the States that the next 10 years must be invested in them, only then will India get desired results in such sports events. Organising and promoting sports events and tournaments at local and district level and keeping data of players will create a vibrant sports environment.

PM Modi said that soon India would be launching the National Manufacturing Mission (NMM). Every State must give this top priority and create infrastructure to attract global companies. He further said that it included Ease of Doing Business, especially with respect to land, utilities and social infrastructure. He also called upon states to encourage manufacturing, boost ‘Ease of Doing Business’ and strengthen the services sector. In the services sector, PM Modi said that there should be greater emphasis on other areas like Healthcare, education, transport, tourism, professional services, AI, etc. to make India a Global Services Giant.

Prime Minister also emphasized that as India aspires to be the food basket of the world, we need to shift to high value agriculture, dairy, fisheries, with a focus on exports. He pointed out that the PM Dhan Dhanya Scheme has identified 100 districts with lower productivity. Similarly, in learning outcomes States must identify the lowest 100 districts and must work on addressing the issues around the low indicators.

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Prime Minister noted that the Conference reflects India’s tradition of collective thinking and constructive policy dialogue, and that the Chief Secretaries Conference, institutionalised by the Government of India, has become an effective platform for collective deliberation.

Prime Minister emphasised that States should work in tandem with the discussions and decisions emerging from both the Chief Secretaries and the DGPs Conferences to strengthen governance and implementation.

Prime Minister suggested that similar conferences could be replicated at the departmental level to promote a national perspective among officers and improve governance outcomes in pursuit of Viksit Bharat.

Prime Minister also said that all States and UTs must prepare capacity building plan along with the Capacity Building Commission. He said that use of Al in governance and awareness on cyber security is need of the hour. States and Centre have to put emphasis on cyber security for the security of every citizen.

Prime Minister said that the technology can provide secure and stable solutions through our entire life cycle. There is a need to utilise technology to bring about quality in governance.

In the conclusion, Prime Minister said that every State must create 10-year actionable plans based on the discussions of this Conference with 1, 2, 5 and 10 year target timelines wherein technology can be utilised for regular monitoring.

The three-day Conference emphasised on special themes which included Early Childhood Education; Schooling; Skilling; Higher Education; and Sports and Extracurricular Activities recognising their role in building a resilient, inclusive and future-ready workforce.

Discussion during the Conference

The discussions during the Conference reflected the spirit of Team India, where the Centre and States came together with a shared commitment to transform ideas into action. The deliberations emphasised the importance of ensuring time-bound implementation of agreed outcomes so that the vision of Viksit Bharat translates into tangible improvements in citizens’ lives. The sessions provided a comprehensive assessment of the current situation, key challenges and possible solutions across priority areas related to human capital development.

The Conference also facilitated focused deliberations over meals on Heritage & Manuscript Preservation and Digitisation; and Ayush for All with emphasis on integrating knowledge in primary healthcare delivery.

The deliberations also emphasised the importance of effective delivery, citizen-centric governance and outcome-oriented implementation to ensure that development initiatives translate into measurable on-ground impact. The discussions highlighted the need to strengthen institutional capacity, improve inter-departmental coordination and adopt data-driven monitoring frameworks to enhance service delivery. Focus was placed on simplifying processes, leveraging technology and ensuring last-mile reach so that benefits of development reach every citizen in a timely, transparent and inclusive manner, in alignment with the vision of Viksit Bharat.

The Conference featured a series of special sessions that enabled focused deliberations on cross-cutting and emerging priorities. These sessions examined policy pathways and best practices on Deregulation in States, Technology in Governance: Opportunities, Risks & Mitigation; AgriStack for Smart Supply Chain & Market Linkages; One State, One World Class Tourist Destination; Aatmanirbhar Bharat & Swadeshi; and Plans for a post-Left Wing Extremism future. The discussions highlighted the importance of cooperative federalism, replication of successful State-level initiatives and time-bound implementation to translate deliberations into measurable outcomes.

The Conference was attended by Chief Secretaries, senior officials of all States/Union Territories, domain experts and senior officers in the centre.