Boost to PMAY with Rs 2.2 trn assistance, Rs 4000 crore credit-linked subsidyWith an aim to address the housing needs of the urban poor and middle class families, Finance Minister Nirmala Sitharaman has announced an investment of Rs 10 lakh crore under the PM Awas Yojana-Urban 2.0
This includes central assistance of Rs 2.2 lakh crore in the next five years.Speaking about the PM Awas Yojana, the Union Minister stated that 3 crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been announced for which necessary allocations are being made in the Budget.
She further said that under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of Rs 10 lakh crore. This will include central assistance of ₹ 2.2 lakh crore in the next 5 years.
A provision of interest subsidy to facilitate loans at affordable rates is also envisaged, she added.
Rs 4,000 crore for the credit-linked subsidy scheme
The government brought back interest subsidy under the Pradhan Mantri Awas Yojana (Urban) 2.0 and set aside Rs 4,000 crore for the credit-linked subsidy scheme (CLSS).
In the 2024–25, union budget, PMAY-U has been allocated Rs 30,170 crore, an increase of 20.19% from the 2023-2024 budgetary allocation.
According to the budgetary document, Rs 3,000 crore has been allocated for EWS and LIG groups to construct houses under CLSS in urban areas, while the middle income group will be provided Rs 1,000 crore.
It is to be noted that the PMAY(U)-Credit Linked Subsidy Scheme interest subvention has been a primary demand-side driver, with the National Housing Bank (NHB) releasing Rs 49,460.1 crore in subsidies benefiting over 21.1 lakh households by March 2024.
The Rs. 2.2 lakh crore allocation for urban housing initiatives under PMAY-U over the next five years underlines the strong focus of the government on affordable housing for the poor and middle class. The fiscal support will boost demand for housing financeManish Sheth, MD & CEO, JM Financial Home Loans
Finance Minister further said that the Union Government will work with states to facilitate development of ‘Cities as Growth Hubs’. “This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes”, she added.
For creative brownfield redevelopment of existing cities with a transformative impact, the the minister said that the government will formulate a framework for enabling policies, market-based mechanisms and regulation.
In her Union Budget speech, she announced that Transit Oriented Development plans for 14 large cities with a population above 30 lakh along with an implementation and financing strategy.
The FY25 Union Budget represents a decisive step forward in addressing India’s housing needs with the expansion of the Pradhan Mantri Awas Yojana (PMAY) to include 3 crore additional houses. This ambitious plan, supported by a proposed central assistance of ₹2.2 lakh crore over the next five years, underlines the Government’s commitment to providing quality housing for all. The introduction of an interest subsidy scheme for urban housing will make loans more affordable, enhancing access for many looking to realise their housing dreamsDeepak Patkar, MD & CEO of Smfg Grihashakti
Lowering duties for properties purchased by women
Another significant announcement made by the Finance Minister is the lowering duties for properties purchased by women.The Minister emphasized that centre will encourage the states which continue to charge high stamp duty to moderate the rates for all.
Speaking about water supply and sanitation, she said that the centre in partnership with the state governments and Multilateral Development Banks will promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects.
She also added that these projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas.
Rental housing for industrial workers
In the Union Budget, the Finance Minister also announced a provision of rental housing with dormitory type accommodation for industrial workers.
She said this type of accommodation will be facilitated in PPP mode with VGF support and commitment from anchor industries.
She further added that enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.
Land reforms in rural and urban areas
The budget proposed that the land-related reforms and actions, both in rural and urban areas, will be incentivized for completion within the next 3 years through appropriate fiscal support.
Rural land related actions will include assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, digitization of cadastral maps, survey of map sub-divisions as per current ownership, establishment of land registry and linking to the farmers registry.
Regarding urban land related actions, the Finance Minister said that land records in urban areas will be digitized with GIS mapping.
An IT based system for property record administration, updating, and tax administration will be established.
