Economic Survey: Over 96 lakh houses delivered under PMAY-U as affordable housing demand rises

India’s flagship Pradhan Mantri Awas Yojana-Urban (PMAY-U) has become central to addressing the country’s urban housing shortage, particularly for low- and middle-income households.

Under the two phases of the PMAY-U, a total of 122.06 lakh houses have been sanctioned, of which 96.02 lakh have been completed and delivered to beneficiaries across the country as of November 24, 2025, showed the Economic Survey 2025-26.

The Survey highlights that informality remains a persistent feature of Indian cities, manifesting in slums, informal work, and unregistered enterprises. Informal settlements provide low-cost housing near employment hubs, absorb excess labour, and fulfil consumption and production needs that formal systems often cannot meet.


This suggests that informality is not a temporary aberration but a structural outcome of rapid urbanisation under constrained formal mechanisms.

Affordable housing shortages have grown sharply over the past decade. The Technical Urban Group (TG-12) report on Urban Housing Shortage 2012-17 estimated a deficit of 18.8 million houses, with 15 million households living in congested conditions.


An ICRIER study estimated the shortage rose to 29 million by 2018, almost entirely among low-income groups. More recent projections by Knight Frank and NAREDCO suggest cumulative affordable housing demand in India will reach 30 million units by 2030, while the share of affordable homes (under Rs 50 lakh) in the top eight cities fell to 17% in 2025 from 52.4% in 2018.

The Survey also notes that affordable housing increasingly appears in city peripheries, where land costs are lower and larger plots are available. While this supports affordability for low- and middle-income buyers, these locations often lack sufficient infrastructure, including mass transit, connectivity to employment centres, and civic amenities, limiting their liveability.

Government interventions to support affordable urban housing include direct tax and GST benefits, priority-sector lending with higher loan-to-value ratios, and recognition of affordable housing projects under infrastructure status. These measures, combined with PMAY-U delivery, have strengthened housing access and supported urban labour-market integration.

The Survey underscores that informal housing and settlements play a structural role in urban development. Rather than being eliminated, informality needs to be integrated into urban planning and housing policy, ensuring that rapid city growth accommodates both affordability and access to essential infrastructure.