<p>This study examines the economic and environmental costs associated with housing construction under the Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) and explores the integration of social costs, particularly emission costs, into overall construction expenditures. Using data from 108 housing models across 15 Indian states, the analysis evaluates cost variations, material choices, and the extent to which green construction materials reduce both monetary and carbon burdens. The findings reveal that the use of conventional materials such as Ordinary Portland Cement (OPC), steel, and burnt clay bricks contributes significantly to emissions, aligning with global research on carbon-intensive construction practices. A correlation analysis highlights a strong positive relationship between conventional material costs and total emissions, underscoring the environmental impact of material selection. Conversely, increased adoption of green materials—such as fly ash bricks, bamboo, and stabilized soil blocks—demonstrates a negative correlation with emissions, reinforcing their potential in mitigating carbon footprints. While greener housing models exhibit lower emissions and operational costs, they often require higher initial investments, necessitating policy support and financial incentives. The study underscores the urgent need to integrate social cost accounting into construction cost frameworks to ensure a more sustainable and economically viable approach to rural housing development.</p>