Last modified: 2026-07-19 23:25 IST
LESSON 5.7 — Housing Policies and National Programs
A. Standard Map — Lesson 5.7
| Topic | Governing Source | Exam Focus |
|---|---|---|
| Institution timeline | Five-Year Plans; MoHUA; NHB Act 1987 | ITPI (1951), HUDCO (1970), NHB (1988) — plan period linkage |
| JNNURM 2005–2014 | JNNURM Mission Guidelines; ch01-part03 | Four sub-missions; BSUP = slum improvement vertical; UIG = infrastructure |
| PMAY-U verticals | PMAY-U Mission Guidelines 2015 | ISSR / AHP / CLSS / BLC — mechanism, minimum unit, central assistance |
| PMAY-U 2.0 (Sept 2024) | PMAY-U 2.0 Cabinet Note; ch01-part03 | Date-sensitive: ISS at 4%; 1 crore houses; ₹2.5 lakh BLC grant; women ownership |
| EWS/LIG/MIG income thresholds | PMAY-U Guidelines 2017 revision | Table: income ceiling + carpet area norm per group |
| RERA 2016 | RERA Act 2016; ch01-part03 | >500 sq.m OR >8 units trigger (OR-logic); exemption = BOTH < 500 AND < 8; 70% escrow |
| Valuation approaches | ch09-part03 | Rental, Land-and-Building, Profit, Development — when each applies |
Exam Anchor: RERA threshold = > 500 sq.m OR > 8 units — if either condition is exceeded, registration is mandatory. Exemption requires both to be below threshold simultaneously. This OR/AND logic is the highest-frequency RERA trap.
Date-sensitive: PMAY-U 2.0 (September 2024) replaces CLSS with ISS at unified 4% subsidy on first ₹8 lakh for income up to ₹9 lakh. PMAY-U 1.0 CLSS rates (EWS/LIG 6.5%; MIG-I 4%; MIG-II 3%) are now closed. GATE 2025+ answers on the current scheme should reference PMAY-U 2.0 ISS.
B. Why It’s Used
National housing programmes operationalise the constitutional right to shelter by channelling central funds to specific income groups through defined verticals. PMAY-U (4 verticals: AHP, BLC, CLSS, ISSR) is the most heavily tested programme — vertical definitions, eligibility, and carpet area norms appear as MCQ and MSQ in every recent GATE paper. ARHC (Affordable Rental Housing Complexes) is an emerging tested topic post-2021. PMAY-U 2.0 (2024) adds new norms tested in 2025 and 2026 papers.
C. Mechanism in Words
- Institution creation — specialised housing and planning bodies are created through Five-Year Plans: ITPI (town planning), HUDCO (urban development finance), NHB (housing finance).
- Programme identification — government identifies the scale of housing shortage and the segments most affected (EWS/LIG).
- Scheme launch — a national scheme (JNNURM, PMAY-U) is designed with verticals targeting different delivery mechanisms (slum rehabilitation, partnership, subsidy, self-build).
- Central and state funding — Centre provides a fixed grant per unit; state provides land or matching share; ULB implements.
- Beneficiary identification and delivery — eligible households identified by income group and Aadhaar; units delivered through the relevant vertical mechanism.
- Regulation — RERA 2016 protects buyers in the formal private market; escrow ensures developer accountability.
D. Core Concept Explanations
C1. Institution Timeline — ITPI, HUDCO, NHB
| Institution | Year | Plan Period | Role |
|---|---|---|---|
| ITPI — Institute of Town Planners India | 1951 | 1st Plan | Professional body for town planners; education, examination, professional standards |
| SPA — School of Planning and Architecture | 1955 | 1st Plan | Premier planning and architecture education institution; Delhi campus oldest |
| HUDCO — Housing & Urban Development Corporation | 1970 | 4th Plan | State-owned enterprise; finances urban housing and infrastructure for state governments and ULBs; subsidised loans for EWS/LIG housing |
| NHB — National Housing Bank | 1988 | 7th Plan | Apex institution for housing finance; regulates Housing Finance Companies (HFCs); nodal agency for PMAY-U CLSS/ISS disbursement (alongside HUDCO) |
Full scheme chain (sequential, exam-critical):
VAMBAY (2001) → JNNURM (2005) → RAY (2013) → PMAY-U (2015) → PMAY-U 2.0 (2024)
- JNNURM ended 2014 — it was NOT merged into PMAY-U.
- RAY merged into PMAY-U in 2016.
- These are separate events; confusing them is a classic trap.
C2. JNNURM (2005–2014) — Four Sub-Missions
The Jawaharlal Nehru National Urban Renewal Mission (2005–2014) was India’s largest urban infrastructure and housing investment programme at the time of launch.
| Sub-Mission | Full Name | Target | Nodal Ministry |
|---|---|---|---|
| UIG | Urban Infrastructure and Governance | 65 mission cities (large urban centres) | Ministry of Urban Development |
| BSUP | Basic Services to the Urban Poor | 65 mission cities — slum improvement | Ministry of Housing and Urban Poverty Alleviation (MHUPA) |
| UIDSSMT | Urban Infrastructure Development Scheme for Small & Medium Towns | Non-mission cities (smaller towns) | Ministry of Urban Development |
| IHSDP | Integrated Housing and Slum Development Programme | Non-mission cities | MHUPA |
BSUP in context of 5.6-5.7: BSUP was the slum improvement vertical of JNNURM — providing housing units, sanitation, water supply, and community infrastructure in the 65 largest cities. It preceded PMAY-U’s ISSR vertical and established the policy precedent for in-situ slum redevelopment at scale.
Most commonly missed sub-mission in exams: UIG (Urban Infrastructure and Governance) is consistently omitted. Always list all four — UIG, BSUP, UIDSSMT, IHSDP.
C3. PMAY-U — Four Verticals (Mechanism Level)
The Pradhan Mantri Awas Yojana — Housing for All (Urban) was launched in June 2015 with a target to provide every eligible urban household a pucca home. It operates through four verticals:
| Vertical | Full Name | Target Beneficiary | Mechanism | Min. Carpet Area | Central Assistance |
|---|---|---|---|---|---|
| ISSR | In-Situ Slum Redevelopment | Slum dwellers on notified/identified slum land | PPP — developer gets additional FSI; provides free EWS unit; cross-subsidy from market-rate units | 30 sq.m | ₹1 lakh per unit |
| AHP | Affordable Housing in Partnership | EWS households; government land provided | State/public agency provides land to developer; minimum 35% EWS units mandatory | 30 sq.m (EWS) | ₹1.5 lakh per EWS unit |
| CLSS / ISS | Credit Linked Subsidy Scheme / Interest Subsidy Scheme | EWS, LIG, MIG on home loan | Interest subsidy on home loan disbursed upfront as NPV; PMAY-U 2.0 → ISS | Depends on income group | Subsidy amount varies (see C4 below) |
| BLC | Beneficiary-Led Construction | EWS/LIG households with own land | Direct grant for self-construction/enhancement; no developer; Direct Benefit Transfer | Self-determined | ₹1.5 lakh (general states); ₹2.5 lakh (NE/hilly) |
ISSR — mechanism in detail:
1. ULB identifies slum; determines number of eligible families.
2. Private developer selected by competitive bidding.
3. Developer provides minimum 30 sq.m carpet area free unit to each eligible slum dweller.
4. Developer receives additional FSI (typically 2.5–4.0) to construct market-rate units on the same plot — cross-subsidy finances free EWS units.
5. Eligibility: beneficiary family must not own a pucca house anywhere in India.
AHP — mechanism in detail:
1. State/UT or public agency provides land.
2. Developer must earmark minimum 35% of units for EWS category.
3. Central assistance ₹1.5 lakh per EWS unit flows to the state/developer for EWS unit construction.
4. Market-rate units cross-subsidise EWS units.
BLC — mechanism in detail:
1. Beneficiary must own land (plot) and not have a pucca house.
2. Direct grant of ₹1.5 lakh (general states) transferred in instalments.
3. No developer involvement — the beneficiary manages construction.
4. Most flexible vertical; most suitable for rural-fringe and smaller towns.
C4. PMAY-U 2.0 (September 2024) — Date-Sensitive Content
Critical for GATE 2025+ and UPSC exams: PMAY-U 2.0 was approved by the Union Cabinet in August 2024 and formally launched in September 2024. Any exam question about the current PMAY-U interest subsidy must reference PMAY-U 2.0 ISS, not the closed PMAY-U 1.0 CLSS rates.
PMAY-U 1.0 CLSS (now CLOSED):
| Category | Subsidy Rate | Max Loan | Carpet Area | Status |
|---|---|---|---|---|
| EWS/LIG | 6.5% | ₹6 lakh | ≤ 60 sq.m | Closed 31 March 2022 |
| MIG-I | 4% | ₹9 lakh | ≤ 160 sq.m | Closed 31 March 2021 |
| MIG-II | 3% | ₹12 lakh | ≤ 200 sq.m | Closed 31 March 2021 |
PMAY-U 2.0 ISS (current, from September 2024):
| Parameter | PMAY-U 2.0 ISS Value |
|---|---|
| Subsidy rate | Unified 4% |
| Loan amount eligible | First ₹8 lakh of loan |
| Income ceiling | Household income up to ₹9 lakh per annum |
| Nodal agencies | NHB + HUDCO (unchanged) |
Other PMAY-U 2.0 changes:
– Target: 1 crore additional urban houses over 5 years (2024–2029)
– BLC grant enhanced: ₹2.5 lakh per unit (up from ₹1.5 lakh) for EWS under BLC vertical
– Expanded to all statutory towns (PMAY-U 1.0 initially covered only 4,041 towns)
– Mandatory sustainable building materials and green building norms
– Women ownership mandatory: all houses to be jointly or solely in the name of a female family member
– Convergence with Swachh Bharat Mission 2.0 and AMRUT for infrastructure
Source: PMAY-U 2.0 Cabinet Note (August 2024); MoHUA Mission Guidelines (September 2024); ch01-part03; ch09-part01.
C5. EWS / LIG / MIG — Income and Area Thresholds
| Income Group | Annual Household Income (PMAY-U 2017 revision) | PMAY-U Carpet Area Norm |
|---|---|---|
| EWS | Up to ₹3 lakh | Up to 30 sq.m |
| LIG | ₹3–6 lakh | Up to 60 sq.m |
| MIG-I | ₹6–12 lakh | Up to 160 sq.m |
| MIG-II | ₹12–18 lakh | Up to 200 sq.m |
| HIG | Above ₹18 lakh | No ceiling |
Important: These are PMAY-U income definitions. NBC 2016 and URDPFI use different income classifications in some contexts. For any exam question that specifies “under PMAY-U,” use the above thresholds.
EWS plot size under URDPFI 2015 (separate from PMAY-U carpet area):
– EWS minimum plot: 25 sq.m (metro); up to 40 sq.m (non-metro)
– LIG minimum plot: 40–80 sq.m
C6. RERA 2016 — Registration Threshold, Exemptions, and Key Provisions
The Real Estate (Regulation and Development) Act 2016 was enacted to protect homebuyers and regulate the real estate sector.
Registration threshold (the most-tested RERA provision):
RERA registration is mandatory for any real estate project where:
Total area > 500 sq.m (of land to be developed) OR total units > 8 apartments
— whichever threshold is crossed first triggers mandatory registration.
Exemption logic — the AND condition:
| Scenario | Registration Required? |
|---|---|
| Project: 600 sq.m area, 6 units | Yes — area > 500 sq.m triggers (even though units < 8) |
| Project: 400 sq.m area, 10 units | Yes — units > 8 triggers (even though area < 500 sq.m) |
| Project: 600 sq.m area, 10 units | Yes — both triggers exceeded |
| Project: 400 sq.m area, 6 units | No — both conditions below threshold (< 500 sq.m AND < 8 units) |
| Project with Completion Certificate before RERA commencement | Exempt — completed projects are exempt |
RERA trap: Many candidates believe the exemption is “OR” — that a project is exempt if area < 500 OR units < 8. The correct rule: exemption only when BOTH area < 500 sq.m AND units < 8 simultaneously.
Other key RERA provisions (awareness level):
– 70% of buyer payments must be held in an escrow account linked to project completion — prevents diversion of funds.
– Real Estate Regulatory Authority (RERA) established in each state and UT.
– Real Estate Appellate Tribunal (REAT) — appeals body.
– Agent registration mandatory for any agent involved in RERA-registered project transactions.
– Carpet area as defined by RERA = usable floor area (excluding walls, balconies) — standardises a previously manipulated measure.
– Promoter must obtain all approvals before launching — prevents under-construction project launches without clear title.
C7. Valuation Approaches — When Each Applies
Three principal valuation approaches are used in Indian real estate practice, each derived from a different conceptual basis.
| Approach | Also Called | Applicable When | Core Logic |
|---|---|---|---|
| Market (Comparison) Approach | Direct comparison; sales comparison | Active market with frequent sales of comparable properties; residential plots and standard apartments | Value = price a willing buyer pays a willing seller in an arm’s-length transaction; compare recent sale prices of similar properties; adjust for differences |
| Income (Rental) Approach | Investment method; rental method; capitalisation method | Income-generating properties: commercial buildings, industrial premises, offices, rental apartments | Value = Net Annual Rent × Years’ Purchase (YP = 1/yield); YP converts annual income stream into a capital sum |
| Cost (Land-and-Building) Approach | Physical method; contractor’s method | No comparable sales or rental market: owner-occupied houses, special-purpose buildings (temples, schools, hospitals), unique properties | Value = Market value of land + Depreciated replacement cost of building |
| Development Method | Residual method; hypothetical building scheme | Undeveloped or under-developed land where value depends on development potential | Land Value = GDV − construction − professional fees − finance − developer’s profit (15% site area deducted for roads/amenities) |
| Profit Method | Accounts method | Special-use properties where value is a function of business profits: cinemas, hotels, petrol pumps, nursing homes | Value = net profit (property share, excluding goodwill) × YP; average last 3 years; deduct goodwill component |
Purpose-specific valuation (exam-relevant):
| Purpose | Preferred Method | Rationale |
|---|---|---|
| Mortgage / home loan | Conservative Rental or Land-and-Building | Safeguards lender; value should not be overstated |
| Purchase / sale | Market comparison | Actual market prices; both parties’ interests |
| Land acquisition (LARR) | All three methods may be used liberally | Unwilling seller deserves generous compensation |
| Property tax (municipal) | Market value basis | Annual rental value or capital value depending on state system |
| Insurance | Replacement cost (Land-and-Building) | Cost to rebuild — land does not burn; exclude land value |
Source: ch09-part03 Sections 9.13, 9.14; Transfer of Property Act 1882; RERA 2016.
E. Scheme Comparison Table — JNNURM vs PMAY-U + RERA Applicability Worked Examples
D1. JNNURM vs PMAY-U — Key Comparison
| Dimension | JNNURM (2005–2014) | PMAY-U (2015–2024) / PMAY-U 2.0 (2024–) |
|---|---|---|
| Mission type | Infrastructure + housing (dual) | Housing-focused (four verticals) |
| Slum vertical | BSUP (Basic Services to Urban Poor) | ISSR (In-Situ Slum Redevelopment) |
| Approach | Supply-side: government-built housing + infrastructure | Demand + supply: credit subsidy + PPP + direct grant |
| Target cities | 65 mission cities (UIG/BSUP) + smaller towns (UIDSSMT/IHSDP) | All 4,041 statutory towns (expanded to all statutory towns in 2.0) |
| Slum unit size | Minimum 25 sq.m (BSUP norm) | Minimum 30 sq.m carpet area (PMAY-U ISSR norm) |
| Central assistance | 80:10:10 (Centre:State:ULB) for general states | Varies by vertical; ISSR ₹1 lakh/unit; BLC ₹1.5 lakh/unit (₹2.5 lakh in 2.0) |
| End date | Ended 2014 (NOT merged into PMAY-U) | PMAY-U 1.0 → 2015–2024; PMAY-U 2.0 → 2024–2029 |
| Key PYQ trap | “JNNURM was replaced/merged into PMAY-U” | JNNURM ended; RAY (a separate scheme) was merged into PMAY-U in 2016 |
D2. RERA Applicability — Worked Examples
Scenario 1:
A developer proposes to build 12 apartments on a 450 sq.m plot in Bengaluru. Is RERA registration mandatory?
Analysis: Area = 450 sq.m (< 500 sq.m threshold) BUT units = 12 (> 8 units threshold).
Since units > 8, the units threshold is crossed → RERA registration is mandatory.
The OR-logic means either threshold crossing triggers registration.
Scenario 2:
A builder constructs 6 independent villas on a 3,000 sq.m layout. Is RERA registration mandatory?
Analysis: Area = 3,000 sq.m (> 500 sq.m threshold) → RERA registration is mandatory.
Even though units (6) < 8, the area exceeds 500 sq.m — OR-logic applies.
Scenario 3:
A small developer proposes 5 apartments on a 380 sq.m plot. Is RERA registration mandatory?
Analysis: Area = 380 sq.m (< 500 sq.m ✓) AND units = 5 (< 8 ✓).
Both thresholds below limit → RERA registration is NOT mandatory (exempted).
F. Design Criteria
| Vertical / Programme | Key Criterion |
|---|---|
| AHP (Affordable Housing in Partnership) | Central assistance ₹1.5 lakh/unit; EWS units ≥35% of project; state/private developer partnership |
| BLC (Beneficiary-Led Construction) | Central assistance ₹1.5 lakh directly to individual household; EWS/LIG beneficiary builds own home |
| CLSS (Credit Linked Subsidy Scheme) | Interest subsidy on home loan: EWS/LIG = 6.5% on ₹6 lakh for 20 years; MIG-I = 4%; MIG-II = 3% |
| ISSR (In-Situ Slum Redevelopment) | TDR/FAR incentive to developer; slum dwellers get free pucca units; 30 sq m minimum carpet |
| ARHC | Repurpose vacant government housing as affordable rentals; new construction by PPP; for migrants and urban poor |
Code Comparisons
| Programme | Year | Predecessor | Income Target | Delivery Mode |
|---|---|---|---|---|
| PMAY-U 1.0 | 2015 | JNNURM/RAY | EWS/LIG/MIG | 4 verticals; central + state + ULB |
| PMAY-U 2.0 | 2024 | PMAY-U 1.0 | EWS/LIG focus | Revised subsidy; urban poor priority |
| ARHC | 2020 | PMAY-U component | Migrants, urban poor | Rental; existing stock + new construction |
| RAY (Rajiv Awas Yojana) | 2009 | BSUP (JNNURM) | Slum dwellers | Slum-free city planning |
| BSUP (JNNURM) | 2005 | Predecessor | Urban poor | Basic services + housing; 12 cities |
G. Application Zones
- EWS/LIG homeownership: CLSS and BLC target individual households unable to access market housing
- Slum redevelopment: ISSR vertical uses TDR/cross-subsidy to finance in-situ redevelopment without full public expenditure
- Migrant worker housing: ARHC fills rental gap for circular migrants and urban informal workers
- GATE AR exam: MCQ — match vertical to eligibility; MSQ — select all valid PMAY-U verticals; NAT — subsidy calculation, density, or FAR
H. Common Confusions
| Confusion | Clarification |
|---|---|
| “JNNURM was merged into PMAY-U” | JNNURM ended in 2014 — it was a separate programme that concluded. RAY (Rajiv Awas Yojana) was merged into PMAY-U in 2016. |
| “RERA exemption = area < 500 OR units < 8” | Exemption requires both area < 500 sq.m AND units < 8 simultaneously. The trigger is OR; the exemption is AND. |
| “PMAY-U 2.0 has the same CLSS rates as PMAY-U 1.0” | PMAY-U 2.0 replaces CLSS with ISS at unified 4% on first ₹8 lakh for incomes up to ₹9 lakh. PMAY-U 1.0 CLSS (6.5% for EWS/LIG) is closed. |
| “AHP requires government to build the houses” | AHP provides land and central assistance — a private or public developer builds; the developer must include minimum 35% EWS units. |
| “BLC is only for rural households” | BLC (Beneficiary-Led Construction) is a PMAY-U vertical — it covers urban households with their own land, not rural households (PM Awas Yojana-Gramin covers rural). |
| “EWS income ceiling is ₹2.5 lakh” | EWS = up to ₹3 lakh per annum (PMAY-U 2017 revision). ₹2.5 lakh was an earlier threshold. |
| “RERA carpet area includes balconies” | RERA-defined carpet area = usable floor area excluding walls, terraces/balconies, and exclusive open terraces. Balconies are separately disclosed. |
I. Compare & Contrast
| Parameter | AHP | BLC |
|---|---|---|
| Who builds | State government / private developer | Individual beneficiary household |
| Central assistance | ₹1.5 lakh/unit | ₹1.5 lakh/household |
| EWS requirement | ≥35% of project units must be EWS | Directly targets EWS/LIG |
| Land ownership | Developer/state provides land | Beneficiary owns land |
| GATE trigger | “Partnership” + “developer” + “35% EWS” | “Beneficiary-led” + “individual” + “own construction” |
J. Memory Hooks
- PMAY-U = ABCI: AHP (Affordable Housing Partnership), BLC (Beneficiary-Led Construction), CLSS (Credit-Linked Subsidy), ISSR (In-Situ Slum Redevelopment)
- CLSS rates: EWS/LIG = 6.5% subsidy (highest, poorest group), MIG-I = 4%, MIG-II = 3%
- ISSR = slum on government land + TDR to developer = free housing for slum dwellers (cross-subsidy)
- ARHC = vacant govt quarters + PPP → rentals for migrants (announced during COVID-19 pandemic context)
- 2015 = PMAY-U launch year = Housing for All by 2022 target (now extended)
K. Revision Ladder
| Step | What to revise | Exam relevance |
|---|---|---|
| 1 | PMAY-U 4 verticals: AHP, BLC, CLSS, ISSR — definitions and eligibility | GATE MCQ — most frequently tested housing programme |
| 2 | CLSS subsidy rates: EWS/LIG = 6.5%; MIG-I = 4%; MIG-II = 3%; loan cap | GATE MCQ/NAT |
| 3 | ISSR: TDR mechanism; cross-subsidy; 30 sq m minimum for slum dweller unit | GATE MCQ |
| 4 | ARHC: target group (migrants, urban poor); existing stock + new PPP | GATE MCQ |
| 5 | PMAY-U 2.0 (2024): revised norms; EWS/LIG focus | GATE MCQ 2025/2026 |
| 6 | Predecessor programmes: RAY → PMAY-U; BSUP (JNNURM) → RAY | GATE MCQ |
| 7 | GATE AR 2025 Q66 (Ans: B — AHP vertical); GATE AR 2026 Q20 (Ans: B,C,D — PMAY-U 2.0 verticals) | PYQ review |
End of Lessons 5.6 and 5.7
L. Exam Traps
| Trap | Incorrect Belief | Correct Principle |
|---|---|---|
| RERA threshold logic | “A project with 700 sq.m area but only 5 units is exempt” | RERA mandatory for area > 500 sq.m — regardless of unit count. OR-logic: either threshold triggers registration. |
| RERA exemption logic | “Exempt if area < 500 sq.m OR units < 8” | Exempt only if area < 500 sq.m AND units < 8 — both simultaneously below threshold |
| PMAY-U 2.0 ISS rate | Current subsidy rate = 6.5% (PMAY-U 1.0 EWS/LIG rate) | PMAY-U 2.0 (Sept 2024): unified 4% on first ₹8 lakh for income ≤ ₹9 lakh |
| JNNURM end vs merge | JNNURM was merged into PMAY-U | JNNURM ended 2014; RAY was merged into PMAY-U in 2016; these are separate facts |
| BSUP vs ISSR | BSUP and ISSR are the same slum vertical under different names | BSUP = JNNURM sub-mission (2005–2014). ISSR = PMAY-U vertical (2015–present). Different programmes, different mechanisms. |
| AHP minimum EWS share | AHP requires 25% EWS units | AHP requires minimum 35% EWS units — not 25% or 50% |
| BLC central assistance | BLC grant = ₹1 lakh (general states) | General states = ₹1.5 lakh (PMAY-U 1.0); ₹2.5 lakh (PMAY-U 2.0). NE/hilly states always higher. |
| EWS income threshold | EWS = ₹2.5 lakh or ₹2 lakh | EWS = up to ₹3 lakh per annum (PMAY-U 2017 revision). |
| Market approach = only valid method | Market comparison is always appropriate | Market approach works only with comparable sales; rental method applies to income properties; cost method for special-purpose buildings; development method for undeveloped land |
| NHB as direct lender | NHB directly lends to homebuyers | NHB is the apex regulator and refinancer for housing finance companies; the nodal disbursement channel for PMAY-U CLSS/ISS — it does not directly lend to individual homebuyers |
M. Answer-Writing Cues
MCQ (RERA threshold):
Template: “RERA threshold = > 500 sq.m OR > 8 units. The OR triggers registration if either is exceeded. Exemption = both area < 500 sq.m AND units < 8 simultaneously.”
MCQ (PMAY-U vertical identification):
Template: Apply the vertical diagnostic: Slum on slum land with PPP → ISSR. Government land + developer + 35% EWS → AHP. Home loan subsidy → ISS (PMAY-U 2.0). Self-build on own land → BLC.
Short answer (PMAY-U 2.0 ISS, 2 marks):
Template: “PMAY-U 2.0 (September 2024) replaced the closed CLSS with the Interest Subsidy Scheme (ISS): a unified 4% interest subsidy on the first ₹8 lakh of home loan for households with annual income up to ₹9 lakh. The mission targets 1 crore additional urban houses (2024–2029), with enhanced BLC grant of ₹2.5 lakh, mandatory women ownership, and expansion to all statutory towns.”
Short answer (valuation method selection, 2 marks):
Template: “The appropriate valuation method depends on the property type and purpose: (1) Market approach — standard residential; active comparable sales market. (2) Rental/Income approach — commercial/industrial income-generating properties; capitalise net annual rent at an appropriate yield (YP = 1/i). (3) Cost/Land-and-Building approach — owner-occupied, special-purpose (schools, temples); no rental market. (4) Development method — undeveloped land; residual land value after deducting all costs and developer’s profit from GDV.”
N. PYQ Integration (2007–2026 verified)
| Topic | Exam Appearance | Pattern |
|---|---|---|
| RERA threshold (500 sq.m / 8 units) | GATE AR; UPSC; State PSC | MCQ on OR logic; worked example testing exemption |
| PMAY-U vertical identification | GATE AR multiple years | MCQ: match scenario to vertical (ISSR / AHP / ISS / BLC) |
| PMAY-U 2.0 verticals (AHP, ARH, BLC; ISSR discontinued) | GATE AR 2026 | MSQ: identify which verticals are included in PMAY-U 2.0 |
| GATE AR 2025 Q66 — Ans: B | MCQ | AHP vertical under PMAY-U |
| GATE AR 2024 Q18 — Ans: A | MCQ | Oxidation pond for wastewater treatment |
| GATE AR 2024 Q42 — Ans: A,B,C | MSQ | NBC 2016 — fire terminology |
| GATE AR 2024 Q46 — Ans: 16 | NAT | Concert hall — toilet design NAT |
| JNNURM ended vs merged | GATE AR; UPSC | MCQ trap: “JNNURM merged into PMAY-U” = wrong |
| EWS/LIG income thresholds | GATE AR; State PSC | MCQ: EWS = ₹3 lakh (not ₹2 or ₹2.5 lakh) |
| HUDCO / NHB establishment year | GATE AR; architecture exams | MCQ: HUDCO 4th Plan (1970); NHB 7th Plan (1988) |
| Valuation approach selection | GATE AR; UPSC-CPWD | MCQ: which method for income-generating vs special-use vs undeveloped land |
| GATE AR 2024 Q20 — Ans: A,B | MSQ | Right sequence in water treatment process |
| GATE AR 2024 Q48 — Ans: 167 | NAT | Township PPP mode area calculation NAT |
| GATE AR 2024 Q49 — Ans: 50 | NAT | Solid waste fill volume NAT |
| GATE AR 2025 Q26 — Ans: B | MCQ | BIM 4th and 5th dimension |
| GATE AR 2022 Q12 — Ans: C | MCQ | CLSS guidelines for EWS — carpet area norm |
| GATE AR 2023 Q71 — Ans: B | MCQ | ARHC abbreviation in housing context |
| GATE AR 2026 Q20 — Ans: B,C,D | MSQ | PMAY-U 2.0 verticals |
O. Mini-Check — Lesson 5.7
Q1 (MCQ — PMAY-U vertical)
A local body in Pune has identified a notified slum on a 2-acre government-owned plot. The plan is to involve a private developer who will provide free housing to all eligible slum dwellers and sell market-rate units to recover costs. Which PMAY-U vertical is being used?
(A) Beneficiary-Led Construction (BLC)
(B) Credit Linked Subsidy Scheme (CLSS/ISS)
(C) In-Situ Slum Redevelopment (ISSR)
(D) Affordable Housing in Partnership (AHP)
Answer: (C)
The ISSR vertical involves: a notified/identified slum + PPP with a private developer + free unit to eligible slum dwellers + cross-subsidy from market-rate units on the same land. This matches exactly. BLC (A) requires beneficiaries to have their own land and self-build. ISS (B) is a home loan subsidy. AHP (D) requires government land with 35% EWS units — not slum rehabilitation.
Q2 (MCQ — RERA threshold)
A developer proposes to construct 9 apartments on a 420 sq.m plot. Is RERA registration mandatory?
(A) No — the plot area is below 500 sq.m, so RERA does not apply
(B) No — neither threshold is crossed
(C) Yes — the number of units exceeds 8, triggering mandatory registration
(D) Yes — only if the developer accepts advance payments from buyers
Answer: (C)
RERA registration threshold = > 500 sq.m OR > 8 units. Area = 420 sq.m (< 500 sq.m, not triggered), but units = 9 (> 8, triggered). The OR-logic means crossing either threshold is sufficient. Option (A) is the trap answer — it applies AND-logic incorrectly.
Q3 (MCQ — PMAY-U 2.0 date-sensitive)
Under PMAY-U 2.0 (September 2024), what is the interest subsidy rate and the maximum loan amount eligible for subsidy under the Interest Subsidy Scheme (ISS)?
(A) 6.5% interest subsidy on the first ₹6 lakh of home loan
(B) 4% interest subsidy on the first ₹8 lakh of home loan
(C) 3% interest subsidy on the first ₹12 lakh of home loan
(D) 4% interest subsidy on the full home loan amount
Answer: (B)
PMAY-U 2.0 ISS (from September 2024): unified 4% subsidy on the first ₹8 lakh of home loan, for household income up to ₹9 lakh per annum. Option (A) describes the closed PMAY-U 1.0 EWS/LIG CLSS rate. Option (C) is not a PMAY-U rate. Option (D) is incorrect — the subsidy applies to the first ₹8 lakh only, not the full loan.
Q4 (MCQ — scheme timeline)
Which of the following correctly describes the relationship between JNNURM and PMAY-U?
(A) JNNURM was merged into PMAY-U in 2015
(B) PMAY-U is a successor scheme that absorbed JNNURM’s housing components
(C) JNNURM ended in 2014; RAY (a separate scheme) was merged into PMAY-U in 2016
(D) JNNURM continues as the infrastructure vertical while PMAY-U handles housing
Answer: (C)
JNNURM ended in 2014 — it was not merged or absorbed. It concluded as a time-bound mission. RAY (Rajiv Awas Yojana, a later programme) was merged into PMAY-U in 2016. PMAY-U is not a direct successor of JNNURM — it is a new mission with a different design (demand-side subsidies + verticals, rather than JNNURM’s supply-side infrastructure push).
Q5 (MCQ — valuation approach)
A valuer is asked to determine the value of a municipal school building in a Tier-2 city. No comparable sales exist for similar properties and the building is not income-generating. Which valuation approach is most appropriate?
(A) Market comparison approach — compare with recent sales of commercial buildings
(B) Income (rental) approach — capitalise the school’s hypothetical rental income
(C) Cost (Land-and-Building) approach — land market value + depreciated replacement cost of building
(D) Profit method — capitalise the school’s goodwill value
Answer: (C)
A municipal school is a special-purpose building with no active sales market and no income generation. The Cost / Land-and-Building approach is the correct method: market value of the land (by comparable land sales) + depreciated replacement cost of the building. The Profit method (D) applies to business-profit-driven properties (hotels, cinemas, petrol pumps) — not public facilities.