Finance Minister Nirmala Sitharaman has given a boost to the housing sector through announcement of a 66% hike in the Pradhan Mantri Aawas Yojana (PMAY) outlay to Rs 79,000 crore. She said the government will create Urban Infrastructure Development Fund on the lines of Rural Infrastructure Development Fund and it will be managed by the National Housing Bank.
This is a significant increase by the NDA 2.0 government as the previous budget allocation stood at Rs 48,000 crore. The fund was supposed to complete 80 lakh houses in 2022-23 in both the rural and urban areas.
The increase in allocation under PMAY boost demand for housing credit as more buyers will come forward to purchase the houses.
This is a credit linked subsidy scheme (CLSS) through which the government aimed to provide an interest subsidy to avail loans to purchase or build a house.
The development of scheme so far
As per the Press Information Bureau (PIB) data, overall, 53.42 lakh houses had been completed and delivered out of 1.14 crore sanctioned houses, as of January 3, 2022.
It said 16 lakh houses were being constructed using new technologies. PMAY mandates that female head of house be the owner or the co-owner. 66.90% percent houses in the rural areas are either in the name of women beneficiaries or under joint name of both wife and husband, it added.
How industry leaders react on the development:
Ravi Subramanian, MD & CEO of Shriram Housing Finance ltd.
The union budget 2023-24 is a prudent and growth-oriented budget. The higher capex outlay will have a huge multiplier effect across the economy. The income tax benefits announced will drive consumption by putting more money in the hands of the middle class. The enhanced outlay for the Pradhan Mantri Awas Yojana by 66% to Rs 79,000 cr is great news for affordable housing in urban areas. The Rs 10K cr Urban Infra Development Fund will be used for transforming urban planning and making cities more sustainable and will boost Housing and Housing Finance. Middle-income consumers have benefited significantly from this budget. I believe the announcements made will trigger a pick-up in credit offtake for affordable housing.
Girish Kousgi, MD & CEO, PNB Housing Finance
“As our nation marches towards Amrit Kaal, the intended infusion of Rs.79,000 crores towards affordable housing is a positive move. Its’s a win-win situation fortifying our nations rural infrastructure and adding power to lower and middle income groups. The wheels are set in motion towards an inclusive and sustainable economic growth and this 66% increased commitment will bolster higher rural participation”.
Rashmi Saluja, Executive Chairperson, Religare Enterprises
“MSMEs are growth engines of our economy. The Finance Minister has done a fantastic job in proposing the revamp of the existing credit guarantee schemes for MSMEs through a fresh allocation of Rs9,000 crore will enable relief for smaller entrepreneurs. It will reduce the cost of credit & enable further flow of credit into this stressed sector. The ‘Vivad Se Vishwas’ plan for MSMEs will provide much-needed relief. Also, a reduction in compliance and relaxation of regulatory provisions is a welcome move from ease of doing business perspective. There are many such measures proposed in the Union Budget that will provide fuel to the MSME segment – the potential engine of growth for India’s economy.”
“The creation of an Urban Infrastructure Development Fund (UIDF) to be managed by the National Housing Bank will help in creating essential housing infrastructure in Tier 2 and Tier 3 cities. . Affordable & green housing will now get their rightful due in India’s real estate firmament. In addition to this, it is a tremendous initiative by the government to increase outlay by 66% to Rs 79,000 crore. This will improve the sentiments for all the relevant stakeholder.
The FY24 Union Budget pushes forward India’s Atmanirbhar vision. We are confident that it will herald a truly glorious Amrit Kaal for the country.”
