PMAY-U 2.0 moves from ownership-only housing to a mix of ownership, rental and credit support. Critically examine whether this design addresses India's urban housing shortage.

The Union Cabinet approved PMAY-U 2.0 on 9 August 2024 to support 1 crore more urban families through four verticals: Beneficiary-Led Construction (BLC), Affordable Housing in Partnership (AHP), Affordable Rental Housing (ARH) and an Interest Subsidy Scheme (ISS) [2]. The new design gives families more ways in. But its scale and incentives still fall short of the shortage.

Strengths of the mixed design

• Rental route for mobile workers: ARH targets working women, industrial workers, migrants, students and the homeless [2].
• Credit link: ISS gives a subsidy of up to ₹1.80 lakh on home loans of up to ₹25 lakh for EWS, LIG and MIG families [1].
• Steady delivery and women's ownership: 20.80 lakh houses have been sanctioned so far. About 97% are owned or co-owned by women [1].
• Fiscal equity: The central share is 90% in the NE and hill regions, 100% in other UTs and 60% in other States [2].

Limitations

• Under-scaled: A NITI Aayog–MoHUA committee (2025) put the shortage at 5–7 crore houses. It also called the scheme "demand-driven", meaning it builds for those who apply rather than where the gap is [3].
• Bias towards those who own land: BLC made up about 60% of phase-1 sanctions, which leaves out the landless. Beneficiaries also paid about 60% of the house cost themselves [4].
• Rental still marginal: 27% of urban residents rent their homes. The earlier rental scheme (ARHC) converted only 5,648 vacant houses by February 2023, and only six States have adopted the Model Tenancy Act, 2021 [3].
• Counting output, not outcome: Only about 30% of completed slum-redevelopment houses are occupied. Land is up to 63% of housing cost in metros. Only 19% of the 2024-25 budget was actually spent [3].

Way forward

• Tie new AHP sanctions to how many existing AHP houses are occupied. Use the 16th Finance Commission's grants to urban local bodies to fund water and sewer lines [3].
• Vary central assistance with land cost. Create land banks from unused government land and lease them for rental housing [3].

The mixed design moves policy from building houses towards real housing choice. It will close the shortage only with more money, land reform and rental-law reform. Measuring success by occupied homes, not sanctioned units, would bring "Housing for All" closer to SDG 11.