PMAY emerges as India’s template for the world

Affordable housing is a solution for those who cannot afford to have a roof over their head unless it is subsidised or economised to suit their needs. This price-sensitive segment is always priced out due to higher investment needs that go beyond their loan eligibility. The aspiration of having their own house remains an unmet dream.

Global statistics indicate the number of homeless is increasing not only in underdeveloped and developing nations, but also in developed nations (New York and Los Angeles are two of the cities counted among the top to have large numbers of homeless people). Around 300 million people are homeless globally (according to the United Nations), which will reach 330 million by the end of 2025. Besides this, around 2.8 billion people lack access to adequate housing. More shockingly, around 15 million people worldwide are evicted each year, according to statistics. This number is further increased due to climate adversity and disasters. The world is therefore facing an unprecedented crisis of housing shortage. Housing, more than shelter, is the third skin of human beings, bringing safety, stability, and dignity to the occupier and, ultimately, to the nation through its sustainable foundation in a growing ecosystem. Though the housing problem is universal, its manifestations differ by context and country.

Advertisement

This urgency of affordable housing was critically underlined at the UN-Habitat Assembly in Nairobi on 29-30 May 2025, which adopted the strategic plan for 2026-29, prioritising global needs and calling for coordinated action to treat ‘access to housing’ as a fundamental human right and a cornerstone of sustainable development. The plan seeks to ensure every person has a shelter with dignity and envisages scaling up affordable housing initiatives through innovative financing, public-private partnerships, and policy reform, and by expanding the social protection system to prevent homelessness, etc. In India, 18 lakh people are homeless, of whom 52 per cent are in urban areas, and around 7.3 crore lack access to adequate decent housing (IGH, 2018; Habitat, 2019). The situation is aggravated by population growth, poverty, income inequality, and unemployment-driven city-centric population concentration. The population growth in urban areas has outpaced the growth of urban housing inventories, leading to the discouraging situation of forcing them to live in marginalised spaces, informal settlements on the street side.

This rural-urban migration is a significant problem, particularly in developing countries, where opportunities and livelihoods are believed to be available in urban areas. Homelessness is not a problem that will be eradicated overnight; it requires coordinated action and commitment by all stakeholders. Communities can reverse these trends through positive development on the ground, addressing not only urban housing but also inclusive economic development. Accordingly, India, the most populous country in the world, viewed this as a hurdle to growth that required immediate attention. The Prime Minister announced the Pradhan Mantri Awas Yojana (PMAY) in two phases: PMAY-Urban on 25 June 2015 and PMAY-Gramin on 1 April 2016, with a vision to provide housing for all by 2022, which has now been extended till December 2025. The target beneficiaries shall be the Economically Weaker Sections (EWS), Low Income Groups (LIG) and Middle-Income Groups (MIG) in urban areas.

It has a historical connection to the Indira Awas Yojana, launched a few decades ago. PMAY (Urban) has four components: In-situ Slum Redevelopment (ISSR), Credit Linked Subsidy Scheme (CLSS), Affordable Housing Partnership (AHP) and Beneficiary Led Construction (BLC). The total planned outlay for PMAY (U) under PMAY 1.0 is Rs 8.39 lakh crores. A total of 1.12 crore houses have been sanctioned, and around 96 lakh have been delivered to beneficiaries. Under PMAY 2.0, an additional 10 lakh houses have been sanctioned. To date, out of the Rs 2.05 lakh crore committed, Rs 1.74 lakh crore in central assistance has been released. The commitment vs. plan shows the achievement is around 25 per cent, but the commitment to the disbursement figure indicates a quick, progressive delivery of benefits. The state-wise statistics suggest that the most successful implementation of the PMAY benefit has been achieved by Uttar Pradesh in both the urban and rural schemes, at 98 and 95 per cent respectively.

But ironically, Maharashtra (39 per cent) and Andhra Pradesh (48 per cent) are lagging. The impact of PMAY is not limited to the national focus; it has crossed the geographical boundaries of our country. It has attracted international policymakers because of its innovative structure, which enhances financial efficiency to augment the country’s growth. A house that provides a roof over our heads brings dignity to life by acting as a third skin for our bodies. Therefore, looking at the financial supply chain of this scheme with its structure of Subsidised Home loans under the credit-linked subsidy scheme (CLSS), allowing beneficiaries to avail interest subsidy on their home loan, reducing EMIs (by Rs 2000 to Rs 2500), matching the eligibility of EWS, LIG & MIG (Urban) consumers. In Beneficiary-Led Construction (BLD), the landowner received a subsidy for their own home construction, making the dream a reality. In addition, under the Affordable Housing in Partnership (AHP) programme, private developers received government incentives to provide affordable housing at subsidised rates, mainly in urban areas.

Like PMAY Urban, PMAY Gramin also focused on Rural areas to build 3 crore houses through the Direct Benefit Transfer Process. To achieve women’s empowerment, joint ownership was given greater importance. What attracted countries around the world to the scheme is not only that it addressed the home solution, but also created economic growth through employment generation in construction, steel, cement and associated industries. The private housing segment is under pressure from heavy price corrections (7 to 10 per cent) due to a massive number of inventories being made available by Government housing agencies such as CIDCO, MHADA, HUDCO, etc. Cities like Nagpur, Nashik, Surat, Indore, Raipur, Lucknow, Pune, Ahmedabad and Hyderabad are benefiting from AHP and government housing schemes. Private developers’ monopoly over an arbitrary pricing mechanism is now indirectly regulated through this PMAY project, which has acted as a double-edged sword.

This will bring rationality to the cost structure in the housing market. The banking sector has seen strong business traction due to ample inventory and government-backed housing schemes, driving market demand amid the aspiration to own a home. Therefore, the domestic economy has received a reboot through one key initiative that addresses the bottom of the pyramid and nurtures their latent desire to succeed. In the international forum, the PMAY urban scheme is referred to as “one of the largest affordable housing programmes globally,” indicating that global policymakers are watching us. The challenge perceived by the international community is the supply chain mechanism for delivering without any leakage. The Carnegie Endowment for International Peace has drawn lessons on subsidy design, demand-side support, home-ownership bias, multiple verticals in one scheme, Digital monitoring through geo-tagging, and addressing the large-scale ambition of the individual and country at large.

Global bodies like UN-Habitat and the World Bank cite this scheme as an example of a successful public distribution system. Indonesia’s slum upgrading and state-led models are often discussed alongside PMAY at UN-Habitat. Soon, African countries will adopt their own model based on the PMAY philosophy. Organisation for Economic Co-operation and Development (OECD) researchers have cited PMAY as a benchmark for government-led reform in welfare delivery, through the exemplary utilisation of digital infrastructure and financial inclusion, and by fixing leakages not through threats but through system design, making the system a global template. Homelessness is not inevitable; with coordinated action and commitment, the international community can reverse these trends. As the world meets at the Second World Summit for Social Development in Doha this month, the message is clear: accelerating social progress requires that every person has access to a safe, secure, and dignified place to call home.

(The writer is a Mumbai-based freelance writer, MSME strategist and industry mentor.)