New Launch - India Real Estate Report 2026.
Kerala has cleared the way for the second phase of the Pradhan Mantri Awas Yojana-Urban 2.0. Around 30,000 eligible beneficiaries are expected to receive housing assistance under the programme.
The state Cabinet recently approved implementation of the scheme. It followed the eligibility criteria laid down by the Centre.
The state government will now enter into an MoU with the Centre, the office of Local Self Government Department minister K M Shaji said in a statement. This MoU will formalise the terms under which the second phase moves forward.
Rs 450 crore in Central assistance at stake
The agreement is aimed at securing Rs 450 crore in Central assistance for Kerala. The state could lose this assistance if the scheme was not implemented.
This makes timely implementation an important factor for the state government, given the scale of funding involved.
The Cabinet's approval for the next phase comes as the first phase of the scheme is due to be completed by September 30, 2026, the statement said.
The timing means the state is moving to secure the next phase even as the current one is still being wound up.
Also Read: Maharashtra Approves 1.60 Lakh Houses Under PMAY-Urban
How the Rs 4 lakh funding is split
The funding arrangement under the revised Central guidelines sets out a clear split for each homeless beneficiary:
- Centre: Rs 1.50 lakh
- State government: Rs 1 lakh
- Balance: to come from the municipality and the beneficiary
Total assistance is fixed at Rs 4 lakh per beneficiary. The revised guidelines also stipulate that beneficiaries should bear 25 per cent of the overall project cost.
This requirement means beneficiaries will need to contribute a meaningful share of the total cost themselves, rather than relying solely on government funding.
Also Read: PMAY-U Crosses 1.25 Crore Sanctioned Houses in India
How this differs from the existing LIFE scheme
Kerala's existing PMAY-Urban LIFE scheme follows a different funding pattern.
It applies to homeless beneficiaries who own land. Under it, each house also receives Rs 4 lakh in total. But the split is different:
- Centre: Rs 1.50 lakh
- State: Rs 50,000
- Municipality: Rs 2 lakh
The new PMAY-Urban 2.0 funding pattern therefore shifts a larger share of the contribution onto the state, the municipality and the beneficiary, compared with the existing LIFE scheme structure.
While the total assistance amount stays the same at Rs 4 lakh, the sources of that funding, and how much each party contributes, change considerably between the two schemes.
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