How Carpet Area can Affect your PMAY Subsidy

Check Maximum Carpet Area under PMAY Subsidy

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A flagship mission, the Pradhan Mantri Awas Yojana-Urban, addresses the shortage of houses in urban areas. The scheme hopes to provide a pucca house to all the houses eligible. It has been seen as a major decision that has boosted the housing sector and the construction sector. The government also announced allotments to specify the eligibility criterion for the applicants.

On 16 November 2017, the Government of India sanctioned an increase in the PMAY carpet area of houses. Here, the carpeted area of the house is to be looked at and not the super area. The carpet area is the actual area that is enclosed within the walls. The thickness of the walls inside the house is not included in the total area.

What are the Revised norms of Carpet Area

The carpet area for PMAY again increased in August 2018. This increase is applicable to two categories under the PMAY-U, Pradhan Mantri Awas Yojana-Urban. Take a look at what is the carpet area in PMAY:

Category	Earlier Carpet Area	Increase in 2017	Increase in 2018
Middle Income Group - 1 (MIG 1)	90 square metres	120 square metres	Up to 160 square metres
Middle Income Group - 2 (MIG 2)	110 square metres	150 square metres	Up to 200 square metres

Why the Increase in PMAY Carpet Area Limit

The decision to enhance the carpet area in PMAY came to improve the existing exclusion of the Pradhan Mantri Awas Yojana, which barred the entry of MIG and LIG. The step allowed MIG customers to qualify for the subsidy and avail of the government's benefits. The construction sector is also believed to have benefitted from the scheme.

Maximum Carpet Area for PMAY

Category	Carpet Area under PMAY	Annual Income
Economically weaker sections (EWS)	60 sq meters	Rs. 3 Lakhs
Light Income Group (LIG)	60 sq meters	Rs. 6 Lakhs
Medium Income Group 1 (MIG 1)	160 sq meters	Rs. 6 Lakhs to 12 Lakhs
Medium Income Group 2 (MIG 2)	200 sq meters	Rs. 12 Lakhs to 18 Lakhs

Impact of the Increasing Carpet Area under PMAY Scheme

The new norms that have been introduced would make people who earn between Rs. 6 Lakhs to Rs. 12 Lakhs to qualify for the subsidy interest, under the MIG 1 scheme. In the case of MIG 2, individuals who have an annual income between Rs. 12 Lakhs to Rs. 18 Lakhs can apply. The interest subsidy for MIG 1 remains fixed at 4%, and for MIG 2, it is 3%.

Therefore, an increase in the loan amount would not affect the condition. The repayment tenure, which is up to 20 years, also remains the same.

The increasing area under PMAY Scheme will also affect the RBI. Appertaining to Priority Sector Lending, the following changes will be applicable.

Lending from Rs. 28 Lakhs to Rs. 35 Lakhs in all metro cities
Lending from Rs. 20 Lakhs to Rs. 25 Lakhs in all other centres

Thanks to the increase in loan amount, a positive impact has been seen across sectors like machinery, cement, steel etc. Apart from this, an increased construction also leads to a massive increase in employment opportunities for skilled as well as unskilled labour. The PMAY carpet area increase is surely a step in the right direction and will help many in achieving their goal of owning a home.

Who Would be Eligible for the Subsidy

Primarily, the scheme aims to provide housing for all. A person who already has a house in his/ her name or any of their family member will not be eligible for this scheme. The rule clearly states that the applicant family should:

Not own a pucca house
Not have been a part of any of the Government of India’s housing schemes
Provide their Aadhaar Card when they apply for the loan

Seen as a major step to elevate affordable housing, the enhancement will allow more MIG customers to be qualified for the subsidy and receive the benefits. Let us take a look at the eligibility criteria for PMAY carpet area increase:

1. Economically Weaker Section - The EWS category includes the household where the annual income is less than Rs. 3 Lakhs. The applicant must produce the relevant documents/ proofs to make a claim.

2. Light Income Group - The Light Income Group category comprises individuals whose annual income is more than Rs. 3 Lakhs but less than Rs. 6 Lakhs. To apply for PMAY under LIG, you must submit valid income proof.

3. Medium Income Group 1 - Medium Income Group 1 has individuals earning Rs. 6 Lakhs to Rs. 12 Lakhs per year. But again, you need to provide income proof such as an income certificate to prove your economic status

4. Medium Income Group 2 - Individuals who earn up to Rs. 12 Lakhs to Rs. 18 Lakhs per annum come under the Medium Income Group 2 category. They can avail of a home loan of up to 12 Lakhs by the PMAY.

5. Women - Women belonging to the EWS or LIG can avail of the PMAY loans.

6. Minorities - PMAY loans are available to minorities, including SC, ST, and OBC. When applying for PMAY, applicants will need to provide proof of income and caste.

Conclusion

It is very important for you to know what the carpet area of the house you are about to purchase is going to be, as it will decide the quantum of your PMAY home loan interest subsidy. If, for some reason, the size of the house you have on your mind is not eligible for a PMAY home loan interest subsidy, you can still apply for affordable home loan options through Bajaj Markets. A lending partner of Bajaj Markets will provide you with a housing loan at competitive interest rates and flexible home loan repayment tenure options, provided you meet the home loan eligibility criteria.

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What is Carpet Area?

The carpet area is the usable area for your house. It is a space between the internal walls of the house where a carpet can be laid. The carpet area does not include the area for the balcony or terrace.

What is PMAY Subsidy?

The PMAY Subsidy program is one of the most hailed initiatives taken by the Ministry of Housing and Urban Poverty Alleviation. The scheme offers an affordable housing loan for those with limited income. The government bears half of the cost of the loan. Individuals belonging to the EWS, LIGs, etc., categories are eligible for the PMAY scheme.