The Narendra Modi government will launch the revamped rural and urban housing schemes in the first 100 days, if voted back to power for a third term. The revised schemes could offer enhanced financial assistance to help the middle-class and poor families build houses in the next five years, sources said.
With the affordable rural housing schemes for rural and urban areas coming to an end in March, the Budget for 2024-25 unveiled a plan to build additional houses to meet the requirement arising from an increase in the number of families.
“The details of the schemes are being worked out for implementation immediately after the new government is formed,” an official told FE. The general election will be held from April 19 to June 1. Votes are due to be counted on June 4 and results are expected the same day.
Under the revamped Pradhan Mantri Awaas Yojana- Grameen (PMAY-G), the cash support will likely be enhanced to around Rs 2.3-2.4 lakh/housing unit from Rs 1.2-1.3 lakh in the previous scheme, due to cost escalation. The government will build another two crore affordable houses in the next five years.
The Centre will also launch a revamped urban affordable housing keeping in mind the escalation in costs. Accordingly, it may unveil a new Rs 60,000 crore interest subsidy scheme for the urban poor and middle class for five years. It will offer interest subvention of 3-6% per annum on home loan amounts up to Rs 5 million. The extant scheme offered interest subvention for home loans up to Rs 18 lakh.
The carpet area will likely be much higher than under the new scheme compared with the earlier Credit Linked Subsidy Scheme (CLSS) for the urban poor under the Pradhan Mantri Awas Yojana-Urban (PMAY-U). The carpet area
Under the CLSS scheme of PMAY-U, the Centre was giving an interest subsidy of 6.5% for home loans up to Rs 6,00,000 for the economically weaker sections (carpet area 30-60 sqm), 4% and 3% on loan amount of Rs 6,00,000-12,00,000 and Rs 12,00,000-18,00,000 to beneficiaries belonging to MIG-I (160 sqm) and MIG-II (200 sqm) categories respectively for acquisition/constructions of houses (including re-purchase).
To achieve the target of “Housing for All” in rural areas, the Centre rolled out PMAY-G on April 1, 2016 and sanctioned 29.5 million houses to states. Of these, 26 million houses have been completed by the end of FY24. The Centre has spent Rs 2.72 trillion in the scheme after the scheme was rolled out.
Of the 11.86 million houses sanctioned under PMAY-U after the scheme was rolled out in June 2015, 11.41 million houses have been grounded and 8.2 million houses completed. The Centre has spent Rs 1.63 trillion in the urban housing scheme since FY16.
Besides empowering the neo-middle class in urban areas, the housing schemes would boost the rural economy.