3 min read
25 May 2021

Housing is a basic necessity, but with rising costs of land and homes in India, it remains a dream for most. The central government’s Pradhan Mantri Awas Yojana (PMAY) helps you become a homeowner on easy terms and aims to make housing affordable to all.

The PMAY aims to provide housing for 20 million individuals by 2020 by offering interest subsidies for buying homes and constructing affordable housing. The government has reduced the GST rate on home loans from 12% to 8% for those applying under PMAY schemes. This will give urban home investors like you a big boost.

Benefits of the PMAY scheme

1. Generous subsidies for every citizen

The biggest benefit of the PMAY scheme is the subsidy the government offers to an individual buying their first home. This means neither you nor your family member should be an existing homeowner. The government provides a credit-linked subsidy depending on your income bracket, ranging from economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) 1 and 2.

  • For those who fall under the EWS/ LIG category, home loan interest rates are subsidised by 6.5% for a tenure of 20 years
  • For those who fall under the mid-level MIG category, the home loan interest rate is subsidised by 4% on a maximum loan amount of Rs. 9 lakh for a tenure of 20 years
  • For those who fall under the MIG 2 category, the home loan interest rate is subsidised by 3% on a maximum principal amount of Rs. 12 lakh for a tenure of 20 years

PMAY Scheme Details

The PMAY was introduced by the Government of India on June 1, 2015, under the ‘Housing for All’ mission. The scheme was to be implemented between 2015 and 2022. It includes four components that eligible individuals can benefit from:

  • Credit-linked subsidy scheme (CLSS)
  • Partnered affordable housing
  • Rehabilitation of slum dwellers, in-situ basis
  • Subsidised individual house construction or enhancement

The scheme is divided into PMAY Urban and PMAY Gramin. Individuals who are eligible for PMAY benefits:

Beneficiaries Economic Classification
All Beneficiaries under PMAY (U) scheme Economically Weaker Sections (EWS), Low-Income Group (LIG) and Middle-Income Group (MIG)
Beneficiaries under CLSS of PMAY (U) Low-Income Groups and Middle-Income groups
Beneficiaries under PMAY (G) scheme EWS, LIG and BPL (Below Poverty Line)

Here are some other economic eligibility criteria an individual must fulfil to apply and secure a subsidy for house construction, improvement or enhancement:


MIG - 1

MIG - 2



Annual income (household)

Rs. 6 lakh to Rs. 12 lakh

Rs. 12 lakh to Rs. 18 lakh

Rs. 3 lakh to Rs. 6 lakh

Up to Rs. 3 lakh

Subsidy on home loan interest rate

4% p.a.

3% p.a.

6.5% p.a.

6.5% p.a.

Amount of home loan eligible for subsidy (Maximum)

Rs. 9 lakh

Rs. 12 lakh

Rs. 6 lakh

Rs. 6 lakh

Maximum tenure of home loan (in years)





Amount of subsidised interest (Maximum)

Rs. 2.35 lakh

Rs. 2.30 lakh

Rs. 2.67 lakh

Rs. 2.67 lakh

Dwelling unit’s carpet area (Maximum) (in sq. m.)





Home loan sanction date for scheme applicability (on or after)





Once you find that you are eligible, you can avail a home loan from Bajaj Finserv to finance the purchase of your first house and reduce your EMI burden with the help of PMAY.

2. Housing for all strata of society

Under the PMAY scheme, the government aims to construct two crore affordable houses in prominent urban areas for those eligible under the scheme. The construction of these homes has already begun in states such as Maharashtra, West Bengal and Tamil Nadu. Through these housing projects, the government hopes to uplift the standard of living for many.

3. Housing development in every corner of the country

The PMAY scheme is not restricted only to urban areas. Low- and middle-income groups in rural areas are also being given importance. In rural areas, the Pradhan Mantri Awas Yojana also guarantees development in the rural real estate sector and associated industries.

4. Benefits for women and minorities

PMAY makes a woman’s homeownership a mandatory clause and mentions that the house should be registered in a woman’s name even when she is not buying the property. Preference provisions exist for salaried women, widows, transgender people, the disabled, minorities and seniors to become homeowners under PMAY. Senior citizens buying a home under this scheme are assured of ground-floor accommodation since this is mandatory.

5. Eco-friendly homes

Developers have been instructed to build houses using eco-friendly construction technology and materials. This will ensure limited environmental damage in and around construction sites and will keep pollution levels in check.

Knowing these PMAY benefits, you can now check the PMAY list to see whether you qualify under the scheme. Once you know you are eligible, you can apply for a home loan under PMAY through lenders like Bajaj Finserv. This gives you the PMAY scheme's benefits and of the flexible repayment terms that Bajaj Finserv offers.

Additional Read: Check your name in the Pradhan Mantri Awas Yojana beneficiary list

Bajaj Finserv brings you pre-approved offers for personal loans, home loans, business loans and a host of other financial products. Not only does this simplify the process of availing finance, but it also helps you save time. All you have to do is share a few basic details and check out your pre-approved offer.

Need instant financing? Consider it done with Bajaj Finserv.

Also Read: All you need to know about PMAY

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