He said the government wants to ensure houses for all by 2022.
The prime minister also released the Chhattisgarh Innovation and Entrepreneurship Development Policy.
"The Pradhan Mantri Awas Yojana will benefit people who cannot afford a house themselves. This scheme will also generate a lot of economic activity," Modi said in a statement.
Describing the scheme as more than a mere construction of infrastructure, he said it was a way to help the poor realise their dreams.
He also urged public bodies in all states to take the lead to implement this scheme.
"Innovation is an inevitable element for the progress of any society and nation. During the last five decades the countries which have progressed, had focused more on innovation and entrepreneurship," Modi said.
He said: "Innovation will trigger development of the society as well as economic upliftment of the country."
Referring to the government's Skill India initiative, Modi said: "Almost 65 percent of youth in India would benefit only if they have skills."
Union Minister for Urban Development M. Venkaiah Naidu, Chhattisgarh Governor Balramji Das Tandon and Chief Minister Raman Singh were present on the occasion.
Modi also launched the Dr. Shyama Prasad Mukherjee National Rurban Mission at Kurrubhath village in Rajnandgaon district.
"The mission is aimed at curbing migration of youth from villages to cities. A huge country like India cannot have proper economic development unless even the remotest places are developed as growth centres and provided with urban facilities and good life like education, healthcare and internet while retaining the rural spirit," Modi said on the occasion.
Earlier, Modi unveiled a statue of Sathya Sai Baba, unveiled a plaque for the inauguration of Sri Sathya Sai Sowbhagyam -- Centre for Human Development, and dedicated to the service of humanity, the Sri Sathya Sai Sanjeevani Centre for Child Health Care.