The second edition of the flagship Pradhan Mantri Awas Yojana (Urban) or the Prime Minister’s Housing Scheme, which aims to address housing shortage among urban poor, would provide more cushion to financiers and investors who provide credit facilities to Economically Weaker Sections (EWS) and Lower Income Groups (LIG) in cities for the construction or purchase of their first homes.
The government has increased the corpus of Credit Risk Guarantee Fund Trust (CRGFT) 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) or Primary Lending Institutions (PLIs) to the urban poor for construction and purchase of houses under the scheme.
Further, the management of Credit Risk Guarantee Fund (CRGF) will be transferred to National Credit Guarantee Company (NCGTC) from National Housing Bank (NHB). The CRGF Scheme is also being restructured and modified guidelines will be issued soon, a senior official in the Ministry of Housing and Urban Affairs said.
CRGFT is an instrument issued to protect financiers and investors from possible losses in finance/credit transactions.
The PMAY-U was launched on June 25, 2015. The mission aims to address urban housing shortage among the Economically Weaker Sections, Lower Income Groups and Middle Income Group categories, including slum dwellers by ensuring a pucca (permanent) house to all eligible urban households.
As on date, 118.64 lakh houses have been sanctioned under the PMAY-U.
The approval to the PMAY-U 2.0 was given by the Union Cabinet on Friday. Under this scheme, financial assistance will be provided to 1 crore urban poor and middle-class families to construct, purchase or rent a house at affordable costs through States and Union Territories for the next five years.
A total government subsidy of ₹2.30 lakh crore will be provided under the scheme which would have a total investment of ₹10 lakh crore.
As far as funding mechanism is concerned, the cost of house construction under different verticals would be shared among the Central government, States, Union Territories and Urban Local Bodies and the identified eligible beneficiaries.
A separate Technology and Innovation Sub-Mission (TISM) will also be set up under PMAY-U 2.0 to guide and facilitate States/UTs and other stakeholders in adoption of modern, innovative and green technologies and building material for faster and quality construction of houses.
