PMAY-U: A Catalyst for Startup Growth in Small Towns

When we discuss growth, it’s crucial to explore how various government programmes like PM-KUSUM, MUDRA Loan or PMJDY are contributing to sustainable economic progress in India. A recent study has shown that small cities and towns are becoming hotspots for entrepreneurship. Startups are increasingly emerging in Tier 2 and Tier 3 cities, fostering innovation and vibrant startup economies. A significant contributor to this trend is the Pradhan Mantri Awas Yojana - Urban (PMAY-U), which has improved living standards by providing affordable housing to economically weaker sections. This boost in quality of life plays a key role in supporting entrepreneurial activities and startup growth in smaller towns. Read this TICE Plus feature  explaining the impact of PMAY-U: The Hidden Catalyst for Small Town Entrepreneurship

PMAY-U: Supporting Small Town Economies 

Launched on June 25, 2015, PMAY-U’s goal is to provide affordable housing to India’s urban poor. This scheme primarily focuses on the housing needs of Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG), including slum dwellers. As India continues to urbanize, the demand for housing in these growing small towns is rising, particularly as more individuals migrate for economic opportunities.

By offering affordable housing options, PMAY-U allows skilled professionals and aspiring entrepreneurs to focus on growing their ventures without being burdened by high living costs. This factor is crucial in small-town ecosystems, where affordable housing enables young entrepreneurs and professional to settle and invest in their local economies, creating a ripple effect of job creation and innovation.

Key Objectives of PMAY-U

1. Addressing Housing Shortages: PMAY-U aims to resolve urban housing challenges, particularly for EWS, LIG, and MIG groups, ensuring inclusive development.
2. Providing Pucca Houses: The scheme ensures that eligible families can access permanent, durable housing, essential for fostering economic stability.
3. Empowering Beneficiary Families: Defined as husband, wife, and unmarried children, these families are given a fresh start with improved living conditions, crucial for economic upliftment.

Empowering Startups with Better Living Conditions

Startups in Tier 2 and Tier 3 cities benefit from the improved living standards PMAY-U provides. As housing costs stabilize, more young professionals are willing to relocate to these cities, bringing their entrepreneurial skills with them. Lower costs of living coupled with quality housing enables startup founders to reinvest savings into their businesses, rather than worrying about expensive urban rent or inadequate housing.

How PMAY-U Supports Innovation and Growth

PMAY-U’s infrastructure is built on several pillars:

• In-Situ Slum Redevelopment (ISSR): Utilizes land as a resource to redevelop slums, providing affordable housing in prime urban locations.
• Credit Linked Subsidy Scheme (CLSS): Offers interest subsidies for home loans, encouraging aspiring entrepreneurs and professionals to settle in smaller cities.
• Affordable Housing in Partnership (AHP): Fosters public-private partnerships to create affordable housing, which has a direct impact on small-town startups.
• Beneficiary-Led Construction (BLC): Enables individuals to build or enhance their homes, thereby raising living standards, which is integral to economic growth in developing regions.

Technological Innovation for Seamless Housing Development

Technological advancements in PMAY-U have made its implementation efficient and transparent. For instance:

• Geo-Tagging and Real-Time Monitoring: Satellite technology and geo-tagged photos track housing progress, ensuring projects are completed on time, which helps maintain urban planning efficiency in small towns.
• Credit Linked Subsidy Scheme (CLSS) Awas Portal (CLAP): A real-time portal allows beneficiaries, including entrepreneurs, to track their home loan applications, providing transparency and confidence in the system.

ANGIKAAR Campaign: Aiding Transition to Better Homes

PMAY-U also supports beneficiaries with the ANGIKAAR campaign, which focuses on educating them about water conservation, energy efficiency, and waste management. This social support helps small-town residents adopt better lifestyles, contributing to a more stable and productive entrepreneurial environment.

Progress and Economic Impact of PMAY-U

As of June 2024, PMAY-U has achieved remarkable progress:

• 1.8 crore houses sanctioned, with 1.14 crore grounded for construction and 84.02 lakh completed.
• Rs 1.63 lakh crore has been released, showcasing the government's strong financial commitment toward affordable housing.

The Pradhan Mantri Awas Yojana - Urban has significantly impacted India’s startup ecosystem, particularly in small towns. By improving living conditions and making housing more affordable, the programme has allowed professionals and entrepreneurs to focus on building their businesses, driving local innovation, and contributing to the broader goal of sustainable economic growth. This has transformed small-town India into a hub for entrepreneurial activity, shaping the future of the nation’s startup landscape.