Two crore more rural houses; new scheme to aid ‘deserving’ urban homebuyers

In all, the government has allocated Rs 54,500.14 crore for PMAY-G, which is almost equal to the current year’s budgetary allocation of Rs 54,487.00 crore. However, it is 41 per cent lower as compared to the revised estimate (RE) of Rs 32,000.01 crore.

The PMAY-G allocation has two components — PMAY-program component and interest payment to NABARD for EBR loans. Of these two, the PMAY-program component was allocated Rs 50,486.99 crore in the Budget 2023-24, however, it has been reduced to 28,174.48 crore at the RE stage. The Rs 4,000-crore allocation made for the interest payment to NABARD for EBR loans component has been reduced to Rs 3,825.52 crore at the RE stage. Due to this reduction, the overall allocation of the PMAY-G came down to Rs 32,000.01 crore.

The PMAY-G is a flagship central government scheme, involving the states, that aims to provide pucca houses with a minimum area of 25 square metre with basic amenities to people in rural areas who are homeless or live in kutcha and dilapidated houses.

Each beneficiary gets funds up to Rs 1.2 lakh in the plains and Rs 1.30 lakh in hilly states, difficult areas, and tribal and backward districts under the Integrated Action Plan (IAP). The funds are to be split in a 60:40 ratio between the Centre and states, respectively, with the target of constructing 2.95 crore houses by March 2024.

Against the mandated target of 2.95 crore houses, more than 2.94 crore have already been sanctioned to the beneficiaries by various States/ UTs and construction of 2.56 crore houses has also been completed as on January 31, 2023.

To help the “deserving sections” of the middle class living in the urban areas, the finance minister said, the government will launch a scheme for those living in rented houses, or slums, or chawls and unauthorised colonies’ to buy or build their own houses.

Quoting Prime Minister Narendra Modi’s Independence Day speech last year, where he said: “the weaker sections living in the cities face a lot of problems. Middle-class families are dreaming of buying their own houses. We are coming up with a new scheme in the coming years that will benefit those families that live in cities but are living in rented houses, slums, chawls, and unauthorised colonies. If they want to build their own houses, we will assist them with relief in interest rates and loans from banks that will help them save lakhs of rupees.”

When asked for details of the scheme at a press conference later in the day, Finance Secretary TV Somanathan said a token amount had been included in the interim Budget and once the contours of the scheme are finalised, the allocations would be made.

When asked if the scheme would offer interest subvention, he said, it “could be one of the features of the scheme, but nothing has been finalised yet.”

Somanathan said multiple options were being considered and discussions between the Ministry of Finance and Housing and Urban Affairs were on.

This comes after Housing and Urban Affairs Minister Hardeep Puri said at a press conference in September 2023 that an interest subvention scheme for middle-class homebuyers was in the works. A Ministry source said the scheme is under preparation as of now.

The interim Budget included Rs 500 crore allocation for Credit Risk Guarantee Fund Trust, which was allocated only Rs1 lakh in 2022-2023 and 2023-2024. The total budget for the Ministry of Housing and Urban Affairs in 2024-2025 was proposed at Rs 77,523.58 crore, about 1.4 per cent higher than BE 2023-2024.

The funding for Metro and Mass Rapid Transit System increased by around 7.5 per cent from last year, to Rs 24,931.98 crore.