Union Finance Minister Nirmala Sitharaman while presenting the Interim Budget 2024 has made a promising announcement for the affordable housing segment.
The minister has announced that the government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses.
She said that two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families.
Highlighting the achievement of PM Awas Yojana (Grameen), Union Finance Minister in her Union Budget 2024 speech said that despite the challenges due to COVID, implementation of the scheme continued and the government is close to achieving the target of three crore houses.
A bright roadmap ahead for Housing Finance companies
With the Finance Minister’s announcement, a bright roadmap for the housing finance companies, especially the ones in the affordable segment, can be seen.
Notably, there is a marginal rise in the allocation of the two schemes under PMAY for rural and urban areas from last year’s budget. The allocation to the PMAY-Gramin and Urban was increased to Rs 80,671 crore, including Rs 54,500 crore for PMAY-G, from Rs 79,590 crore in 2023-24.
Speaking with ETBFSI on the government’s move, Ravi Subramanian, MD & CEO, Shriram Housing Finance ltd said, “Though the FM has not raised the cap on the affordable housing segment, the government’s focus on middle-class housing by announcing a scheme to help them buy or build their own houses will boost the country’s housing sector and home loan market.”
“The higher allocation to PMAY-Gramin will also be beneficial for the rural housing segment. The measures will also stimulate the core sector output demand and rural jobs,” he added.
Manish Jaiswal, MD and CEO at Grihum Housing Finance Limited (formerly Poonawalla Housing Finance Limited) said, “I applaud the initiative to create nearly 30 million houses under the PM Awas Yojana (Grameen), with an additional goal of constructing 20 million more in the next five years.”
“Affordable Housing finance companies can significantly contribute to meeting this target,” he asserted.
“Furthermore, the decision to provide free electricity through rooftop solar installations to 10 million houses is a positive step toward fostering Green Housing, crucial for sustainable and clean GDP growth,” he added.
Deepak Patkar, MD & CEO, SMFG Grihashakti, said, “The announcements in the Interim Budget on the intention to launch a new scheme tailored for the deserving sections of the middle class is a step in the right direction towards ensuring universal homeownership.”
“These steps not only support the growth trajectory of the housing sector but it will also help in creating more employment opportunities across its ancillary industries. The government has also stated that they will pay attention to making the eastern region and its people powerful drivers of India’s growth, giving impetus to affordable housing development in the region,” CEO Patkar added.
The Pradhan Mantri Awas Yojana (PMAY) was launched in 2015 as an initiative that aims to provide affordable housing to the poor and eliminate the country’s housing shortage in both rural and urban areas.
It mainly targets the economically weaker sections (EWS), lower-income groups (LIG), and middle-income groups (MIG) in both urban and rural areas.
In her speech at the Parliament, Nirmala Sitharaman emphasised that the Government is working with an approach to development that is all-round, all-pervasive and all-inclusive to make India a ‘Viksit Bharat’ by 2047.