In her Budget speech, the Finance Minister (FM) announced that the government is committed to housing for all. While the Prime Minister (PM) Awas Yojana (Gramin) scheme is close to achieving its target of three crore houses, two crore more houses will be built under the scheme in the next five years.
“The government has consistently directed its efforts towards fostering inclusivity and ensuring adequate living spaces for all. With the recent announcement of constructing an additional two crore houses under the Pradhan Mantri Awas Yojana (Gramin), the emphasis is on expanding affordable housing options for the rural population. This strategic move not only addresses the housing needs of rural communities but also injects momentum into the housing sector in these areas,” says Adhil Shetty, Chief Executive Officer (CEO), BankBazaar.
The introduction of the Pradhan Mantri Awaas Yojana - Gramin (PMAY-G) was aimed at advancing the goals of the "Housing for All Scheme." The primary objective of the PMAY-G initiative is to provide permanent housing with essential amenities, specifically targeting individuals without homes or those residing in inadequate kutcha houses, including those that are severely damaged. At present, the minimum size requirement for houses under the PMAY-G scheme has been increased from 20 square metres to 25 square metres.
Under the Pradhan Mantri Awas Yojana (Gramin) (PMAYG) subsidy scheme, beneficiaries have the opportunity to access loans of up to Rs 70,000 from financial institutions, accompanied by a three per cent interest subsidy. The maximum principal amount eligible for the subsidy is Rs 2 lakh, and the highest subsidy amount applicable for the equated monthly instalment (EMI) payable is Rs 38,359.
The PMAY (Gramin) scheme encompasses several significant features. In plain areas, the cost-sharing ratio between the Central and State governments is 60:40, providing Rs 1.20 lakh assistance for each unit. In Himalayan states, northeastern states, and the Union Territory (UT) of Jammu & Kashmir, the ratio is 90:10, offering assistance of up to Rs 1.30 lakh for each unit. Union Territories, including Ladakh, receive 100 per cent financing from the Centre.
Certain factors may disqualify individuals from benefiting from the PMAY-G scheme, including ownership of motorized vehicles, possessing a Kisan Credit Card (KCC) with a limit greater than or equal to Rs 50,000, government employment or earnings exceeding Rs 10,000 per month, and payment of income tax, professional tax, or ownership of a refrigerator, or landline phone connection.
There was also an announcement in the budget on the launch of a new scheme for the middle class living in rented houses, slums, chawls or unauthorized colonies.
The budget's emphasis on rented homes and slums indicates a targeted approach to uplift the underprivileged, addressing the housing crisis in these vulnerable communities.
“This initiative becomes pivotal as India strives to achieve a USD 7 trillion economy by 2030, necessitating robust urban infrastructure to accommodate the rising population. In conclusion, the proposed measures reflect a holistic approach to housing, aligning with broader economic goals and sustainable development,” says Atul Monga, CEO and co-founder, Basic Home Loan.
The commitment to launch a housing scheme tailored for deserving segments of the middle class, who presently inhabit rented houses, slums, chawls, or unauthorized colonies, marks a substantial step forward in bestowing a sense of security and pride.
“Enabling these individuals to purchase or build their own homes not only fulfils their dreams but also contributes to fostering a stronger and more resilient community,” says Piyush Bothra, co-founder and chief financial officer (CFO), Square Yards.
The government's focus on making housing affordable thus presents numerous possibilities for residential developers.
“Amid positive market synergies in the form of stable interest rates, attractive incentives and increased affordability, domestic investors too are likely to resonate upbeat confidence towards all real estate segments,” says Badal Yagnik, CEO, Colliers India.