Home / Budget / News /  FM to speed up processes for urban housing scheme

NEW DELHI : The upcoming annual budget is likely to propose a major focus on the Pradhan Mantri Awas Yojana (Urban), as the government aims to complete the homes sanctioned under the flagship housing scheme by the extended deadline of December 2024.

In the last Union budget, the Centre had allocated 48,000 crore for the completion of 8 million homes in FY23. This time, the allocation is unlikely to touch the record levels of last year. But, as the government aims to complete the sanctioned 12.2 million houses by December 2024, the allocation would be “significant", said two officials aware of the development.

In August this year, the Union cabinet extended the scheme till December 2024, to give itself time to complete all the homes sanctioned till March 2022. Of the 12.2 million homes sanctioned, 6.5 million have been completed.

The decision provides for financial assistance to be provided for the completion of sanctioned homes.

“The focus will continue to be on regulatory easing and facilitating the completion of the sanctioned homes," said one of the officials.

The official added that the financial assistance would be not as high as the last budget’s allocation as no new homes have been sanctioned now.

On 13 June, Mint reported that the government is unlikely to sanction any more homes under the flagship affordable housing scheme for the next one year as it knuckles down on completing sanctioned projects.

A total of 1.29 trillion has been released by the Centre out of the committed 2.03 trillion so far, according to data on the website of PMAY-U.

Experts suggested the covid-19 pandemic forced a delay in the ‘housing for all’ target, and that the government is now looking at completing the sanctioned houses rather than adding more.

In last year’s Union budget, finance minister Nirmala Sitharaman said that the government would now focus on faster clearances for projects under the scheme.

“The central government will work with the state governments for reduction of time required for all land and construction-related approvals, for promoting affordable housing for middle class and economically weaker sections in urban areas," she said.

Sitharaman added that the Centre would also work with the financial sector regulator to expand access to capital and reduce the cost of intermediation.

As part of this playbook, the Union ministry of housing and urban affairs holds consultations with state government on issues hindering affordable housing projects, including land acquisition and environment-related clearances for projects.

Several demand-boosting incentives under the scheme closed in FY22.

A credit-linked subsidy scheme for people belonging to the middle-income group (MIG) and low-income group (LIG) or economically weaker section (EWS) for affordable housing ended on 31 March.

Similarly, the additional tax deduction of 1.5 lakh on interest paid on housing loans for purchase of affordable homes, the deadline for which was extended twice, also ended in the last financial year.

Recent hikes in interest rates by the Reserve Bank of India are also expected to dampen housing demand going forward.

Queries sent to the ministry of housing and urban affairs and the ministry of finance remained unanswered till press time.


Rituraj Baruah

Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout