For home buyers opting to go for a home loan, the Pradhan Mantri Awas Yojana (PMAY) comes as a delight. PMAY is a Government led scheme by which a home loan borrower gets interest rate subsidy on his outgoing EMI amount, with a view to usher in the element of affordability for the home buyer. There are some changes made by the Government in the PMAY scheme and this article provides information in that regard.

Allowance of increased carpet area of houses as per the new PMAY norms

  • According to reports, the Union Cabinet has allowed for an increment in the allowance of carpet area from 120 sq mt. to 160 sq. mt. for PMAY beneficiaries falling under the Middle Income Group - I (MIG - I)
  • It has also augmented the limit of carpet area from 150 sq. mt. to 200 sq. mt. for Middle Income Group - II (MIG - II)
  • Earlier, w.e.f. Jan 1, 2017, the existing carpet area of 90 sq. mt. was increased to 120 sq. mt. for MIG - I and from 110 sq. mt. to 150 sq. mt. for MIG - II
  • For the Economically Weaker Section (EWS) and the Lower Income Group (LIG), the 30 sq. mt. Carpet area limit will be applicable to homes situated in the municipal limits of 4 metropolitan cities

‘Carpet area’ constitutes the area enclosed within the walls i.e., actual area to lay the carpet. If the outer walls, balcony and other common areas are added, it is the built-up area. The allowance in the increase in carpet area is regarded as a major decision to boost affordable housing under PMAY.

Hike in budgetary provision for Housing and Urban Affairs Ministry

In the recent budget, a major financial boost has been given to Pradhan Mantri Awas Yojana. Rs. 6,853.26 crore has been allotted in 2019-20 interim budget as against the Rs. 6,505 crore allotted in the previous budget 2018-19. This positive move by the Union Cabinet will not only attract more home aspirants to opt for a home loan but will also benefit the real estate sector in terms of growth.

These changes related to PMAY will encourage home buyers to opt for a home loan. Thus if you are planning to buy a home for the first time, the time is ripe to capitalize on these latest developments in PMAY. Go ahead, realise your cherished dream by approaching a bank for a home loan, keeping the credibility factor of the lender into account.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.