From Subsidy To Wealth—How Women Can Build Real Estate Portfolios With PMAY 2.0?

In 2015 India commenced the Pradhan Mantri Awas Yojana [(PMAY)] as part of a wider initiative to provide accommodation facilities to its citizens. It aims to provide "Housing for All" by 2024 achieving its milestones every year. Its last version, PMAY 2.0, which has inclusivity as one of its central concepts, is focused on expanding property ownership among women as a medium of achieving financial self-reliance. By providing tailored subsidies, making property ownership women-centric by necessitating female ownership clauses, and further streamlining access, PMAY 2.0 is not only transforming the housing industry of India but also enabling women to create powerful and diversified portfolios through real estate investment.

Highlights of PMAY 2.0: Consideration of Gender Lens

Innovative changes to encourage women's participation is one of the new strategies incorporated in PMAY 2.0 that further builds over the previous iteration:

Increased Subsidy Payments: Under Economically Weaker Sections (EWS) and Low-Income Groups (LIG), women qualify for the Credit Linked Subsidy Scheme (CLSS) that offers interest repayment subsidies up to 6.5% for home loans worth a maximum of ₹6 lakh, reducing the repayment burden significantly.

Mandatory Female Ownership: Households enrolled under PMAY must legally register the property jointly with or solely to the female head of the household which guarantees ownership and authority.

Preferential Treatment: Women who have never been married, widows, and transgender women are eligible for preferential treatment through allotments which helps to address structural discrimination.

The Ministry of Housing and Urban Affairs has reported that as of 2023, more than 12 million homes have been authorized under PMAY-Urban (PMAY-U), out of which nearly 70% have female co-owners. This change in policy not only fosters inclusivity but also stimulates socio-economic growth since women-headed families tend to spend more on education and healthcare compared to other demographics.

Enabling Women to Create Assets

Under PMAY 2.0, the subsidy for homeownership PMAY grants to women becomes a real asset that improves their credit rating and access to the formal financial market. This especially benefits low-income groups. A 2022 UNDP study found that women are 30% more likely to obtain loans to fund their own businesses if they have legal property rights, which helps them climb the economic ladder.

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited puts it thus: "The backbone focus on women's ownership in PMAY 2.0 will transform the socio-economic landscape of the country. It tackles the issue of financial exclusion while facilitating long-term wealth creation by designating women as primary stakeholders. Affordable housing is not just a means of providing shelter, but a means of generating wealth. With subsidies and ownership, women gain access to the credit market which promotes business and enables inter-generational wealth transfer. This shift in policy also enhances social capital as women are more likely to invest in education and healthcare, which creates a multiplier effect."

Real Estate Sector Response

Real estate developers were quick to appreciate the positive changes in PMAY 2.0 and have already started restructuring their affordable housing projects in tier-2 and tier-3 cities with the new scheme guidelines. The newly created housing clusters are experiencing an unprecedented surge in demand due to women buyers using subsidies.

Manoj Goyal, Director, Forteasia Realty Pvt. Ltd, notes, "The observed shift in the affordable housing segment can be attributed to PMAY 2.0 considering the position of women. As these second and third-tier towns are turning into hotspots, almost 40% of the new buyers are women. Entry barriers created by home loans have been made easier with informal sector workers availing of the CLSS subsidies. Developers are responding with innovative compact designs and cost-efficient construction which fit within the subsidy brackets. This has increased not just the supply of housing but has increased economic activity in these areas leading to job growth in construction, retail and other services. Female ownership is also shifting the balance of modern urbanism requesting safer neighborhoods with community-owned facilities which is housing and social infrastructure."

Empowering Women to Build Wealth Strategically

Apart from self-use primary properties, PMAY 2.0 expands possibilities for long-term diversification of the portfolio. Having used the subsidy for the first home, women can reinvest the harvested equity into affordable rental houses, widening the scope of available rentals. The investment return objectives are further enhanced by tax allowances under Sections 80C and 24 making real estate the investment of choice.

Gaurav Kansal, Director of KBP Group, notes distinctive opportunities: "The underserved markets, especially for women, are now open due to real estate investment being made possible through PMAY 2.0. Due to the subsidy structure, a first-time buyer can come into the market with very little equity and tax benefits make ROI worthwhile. These properties can serve as collateral for secondary loans or can be turned into rental income-generating assets over time. There is great earning potential in the affordable rental housing market which is expected to grow at a decent 15% CAGR. This plan also reduces the risk of asset stripping and provides stronger financial security which by default mitigates safeguard risks. The scheme empowers women which greatly ensures wealth preservation. This is not just creating wealth, it forms the basis for broad-based economic growth."

Challenges and the Road Ahead

Illiteracy and long-drawn bureaucratic processes impose a check on progress regardless of how much has been made. The States of Kerala and Tamil Nadu are pioneering bottom-up programs aimed at informing women about the advantages of PMAY, giving them something to clone. In terms of accessibility, the PMAY-U portal is a digital platform that greatly improves the process of application and is a step towards more accessible options.

PMAY 2.0 goes beyond being merely a housing scheme; it is an instrument of economic and gender empowerment. The government's focus on women's ownership has opened doors to financial participation and wealth generation. As noted by Siddharth Maurya, Manoj Goyal and Gaurav Kansal, joint efforts from the policymakers, developers, and the implementing agencies will be critical to optimize the impact. For women, PMAY 2.0 is not just about building houses, it is about building a future.

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