Government Unveils Ambitious Housing Scheme in Interim Budget 2024-25: A Talk with Thapar Group

Advancing the move towards realising the Housing for All agenda, Finance Minister Nirmala Sitharaman announced on February 1, 2024, a comprehensive housing scheme for the middle class. 

The initiative aims to empower deserving sections of the middle class residing in rented houses, slums, chawls, and unauthorised colonies to own or construct their homes. This strategic step, outlined in the Interim Budget for 2024-25, is expected to accelerate the government's flagship program, the Pradhan Mantri Awas Yojana (PMAY), and bring about a paradigm shift in the affordable housing landscape, says the Executive Director of Indian City Properties Limited (ICPL), a subsidiary of KCT Group.

• PMAY Allocation Boost:

One of the key highlights of the Interim Budget is the substantial increase in allocation for the PMAY mission. The budget earmarks a staggering 49 percent hike, amounting to ₹80,671 crore, emphasising the government's commitment to addressing housing disparities. 

In the previous fiscal year, the revised estimates allocated ₹54,103 crore, signifying a significant ramp-up in financial support for affordable housing initiatives.

• PMAY Rural and Urban Allocations:

Specifically, the allocation for PMAY Rural witnesses a remarkable surge, reaching ₹54,500 crore in the 2024-25 Interim Budget. 

This marks a substantial leap from ₹32,000 crore in the previous year's revised estimates. On the urban front, the allocation for PMAY (Urban) is set at ₹26,170.61 crores, demonstrating a clear commitment to fostering affordable housing in urban centres. 

This allocation exceeds the revised estimate of ₹22,103.03 crore from the preceding fiscal year.

• Impact on Middle-Class Housing:

The central focus of the Interim Budget, the newly introduced middle-class housing scheme, is poised to revolutionise home ownership for a significant segment of the population. ICPL, a subsidiary of KCT Group of Companies, and its head praise the government's initiative, emphasising its alignment with the Housing for All agenda. Thapar Group states, "This not only addresses a crucial need for our young population but also propels the housing sector into a new era of growth, fosters inclusivity, and ensures that homeownership becomes a reality for a larger section of our society."

Experts believe that the emphasis on social housing for economically weaker sections (EWS) and low-income groups (LIG) will strengthen homebuying sentiments. This, in turn, is expected to boost both the supply and demand for affordable houses, creating a positive ripple effect across the real estate sector.

• Unmet Real Estate Sector Demands:

Despite the positive strides in affordable housing, some real estate experts, including the head of Thapar Group express a sense of unfulfilled expectations in the Interim Budget. Key demands from the real estate sector, such as granting industry status and enhancing tax incentives for homebuyers, should have been addressed. He notes the absence of measures like increasing the deduction limit on home loan interest under Section 24 and other targeted incentives.

• Focus on Affordable Housing, Infrastructure, and Green Energy:

While not catering directly to the real estate sector's key demands, the Interim Budget demonstrates a clear commitment to affordable housing, infrastructure development, and green energy initiatives. 

This strategic allocation aligns with the government's broader vision of holistic development and sustainable urbanisation.

• Urban Rejuvenation and Smart Cities Mission:

In a departure from the positive trend, there is a 21 percent dip in allocation for urban rejuvenation and the Smart Cities Mission. The budget allocates ₹10,400 crore for 2024-25, down from ₹13,200 crore in the previous fiscal year's revised estimates. While the reduction raises concerns, the government's prioritisation of affordable housing and rural development remains evident.

The Optimistic Outlook of KCT Group on Real Estate in 2024

India witnesses a transformative leap towards achieving the Housing for All agenda. Spearheading the KCT Group, its director lauds the government's initiative, recognising its alignment with the broader Housing for All vision. He envisions this strategic move as a catalyst propelling the housing sector into uncharted growth territory. He remarks, "The government's announcement addresses a critical need for our young population but fosters inclusivity, ensuring that homeownership becomes a reality for a larger section of our society."

Looking forward to the real estate landscape in 2024, KCT Group of Companies foresees a paradigm shift. He envisions a sector characterised by increased accessibility, where the middle class, previously constrained by financial barriers, can actively participate in homeownership. 

 The 2024-25 Interim Budget acts as a compass, guiding the sector towards an era marked by inclusivity, sustainability, and the fulfilment of the long-standing dream of "Housing for All."