Budget 2024: Homes for one crore poor-middle class families, housing sector expected to grow by 15% in a year

Finance Minister Nirmala Sitharaman presented the Union Budget in the Lok Sabha on July 05, 2019. Major announcements were made for farmers, women, and youth in this. The government announced an interest subsidy scheme to provide a roof over the heads of one crore poor and middle-class families. The state governments have been asked to give exemption on stamp duty especially for women buying property. Where women can live up to their dream of owning a home. While presenting the budget speech, the finance minister expressed his commitment towards building three crore additional houses in rural and urban areas alike as part of the Pradhan Mantri Awas Yojana. Other than that, the government would also construct rental housing and hostel-style accommodations for those industrial workers who migrate to cities for employment purposes. This shall be based on the Public and Private Partnership model.

According to Hiranandani Group Chairman and CEO Niranjan Hiranandani, the growth in the housing sector will go up by 10 percent to 15 percent in another year if the Pradhan Mantri Awas Yojana gets a push in the budget. Government's announcement for affordable housing is going to further raise the business growth of home finance companies by 25 percent. We hope that in five years, as we become a five trillion economy, housing and infrastructure add up to 20 percent to India's GDP. Currently, it contributes 7 percent to the GDP.

According to Sonam Srivastava, small case manager and founder, "Government's announcement to build three crore additional houses shall provide a fillip to the real estate market, though its direct benefit shall accrue to housing finance and cement companies. Housing finance firms would benefit from the increased demand for loans, which will also open new markets and opportunities. Challenge will be in credit assessment and risk management."". To handle this increased demand, cement companies may need to increase production capacity. Companies would focus on the rising cost management of raw materials and investing in production capacity.

The move by the Finance Minister to provide Rs 10 lakh crore in aid to one crore poor middle-class families for purchasing a house gives a fillip to demand in residential properties, said Divyam Maur, a research analyst of Samco Securities. The interest subsidy and funding bodes well for real estate industry developers and small housing finance companies. Under the scheme, Pradhan Mantri Awas Yojana Urban 2.0 has been announced within its scope in the budget according to which, one crore poor and middle class families' requirement for houses will be met with an investment of Rs 10 lakh crore. Central assistance of Rs 2.2 lakh crore shall also be handed over during the next five years. With this, the government will devise a housing subsidy scheme for the provision of loans at affordable rates for urban housing. Along with this, a more transparent and better rent-housing market will also be established whereby city dwellers' lives become easier.