The 2024 Union Budget of India has introduced several transformative measures to revive affordable housing, focusing on enhancing accessibility and sustainability. A sum of Rs. 2.2 lakh crore has been allocated to support the construction of one crore affordable homes under the Pradhan Mantri Awas Yojana (PMAY) in urban areas over the next five years. The overall investment under PMAY is set at ₹10 lakh crores. It aims to address the housing requirements of the urban poor and middle-class families, driving demand for affordable housing and stimulating construction activities. This initiative is expected to improve living conditions in urban areas and attract investments in the real estate market. India's 2024 Interim-Budget had also emphasised on reviving the affordable housing segment through increased allocations and potential policy changes. As millions of Indians aspire to own a home, this budget ambitiously tackles that vital dream. But are these measures enough to close the gap and make homeownership a reality for all? Apart from the allocations under PMAY, the budget also proposed the establishment of rental housing with dorm-like accommodations for industrial workers through a Public-Private Partnership (PPP) model. This aims to address housing shortages in labour-intensive sectors supported by Viability Gap Funding (VGF) and commitments from anchor industries. The significant allocation of ₹11.11 lakh crore for infrastructure development is expected to enhance connectivity and amenities, positively impacting the housing market. The development of investment-ready industrial parks in or near 100 cities aims to attract industrial investments, leading to increased demand for both residential and commercial properties. The budget also encouraged the states to reduce stamp duty rates, particularly benefiting women homebuyers, making property registration more affordable and accessible. The provision of ₹1.5 lakh crore in long-term interest-free loans to states for infrastructure development is expected to enhance the attractiveness of regions for residential and commercial investments. The introduction of unique identification numbers for land parcels and the digitization of urban land records using GIS mapping are expected to bring transparency and streamline land transactions, reducing disputes and fraud. The comprehensive measures introduced in the 2024 Union Budget are anticipated to stimulate growth in the affordable housing sector, creating millions of jobs and fostering inclusive economic development. By addressing the housing needs of various segments, including urban poor and industrial workers, the budget aims to create a balanced and sustainable growth environment in the real estate sector. Recognising the diverse price points required across various locations, the budget proposed raising the cap on affordable housing from ₹45 lakh to ₹65 lakh. This change is expected to make the incentives more accessible to a broader population segment. Additionally, the government allocated Rs. 4,000 crore for the Credit Linked Subsidy Scheme (CLSS), which provides subsidies to first-time homebuyers purchasing affordable properties. While these measures aim to revive the affordable housing segment, challenges remain. Rising construction costs, a demand-supply mismatch, and affordability issues continue to hinder progress. Sustained efforts and a comprehensive policy framework addressing land availability, construction costs, and access to finance will be crucial for the government to make homes accessible to all. The 2024 Union Budget promises to address India's affordable housing crisis. By increasing allocations, redefining affordable housing and providing tax incentives, the government is taking significant steps towards making homeownership a reality for millions of Indians. However, the effectiveness of these measures will depend on their implementation and the ability to overcome the persistent challenges in the sector. Pictures by Getty ImagesKey Initiatives for Affordable Housing
Expected Impact
Challenges and the Way Forward
10 Aug 2024
Aashriti Jha
