Atmanirbhar 3.0: Government Allocates Rs 18,000 Crore More For PMAY (Urban)
A worker carrying a basket of cement on his back walks up a ramp to a residential building under construction. (Photographer: Sara Hylton/Bloomberg)

Atmanirbhar 3.0: Government Allocates Rs 18,000 Crore More For PMAY (Urban)

Finance Minister Nirmala Sitharaman increased the outlay for the urban part of 'housing for all' scheme to help the real estate sector after the Covid-19 lockdown decimated demand.

An additional Rs 18,000 crore will be provided in the 2020-21 fiscal under the Prime Minister Awaas Yojana (Urban) through extra budgetary resources, Sitharaman said while announcing the third tranche of economic stimulus to ease the economic stress stemming from the pandemic. This will be over and above the Rs 8,000 crore allocated in the budget.

Also read: India Expands Stimulus to 15% of Economy as Recession Looms

The measures such as allocation of Rs 18,000 crore for PMAY (U) will further boost the sales of affordable housing units, which surged 109% in the July-September quarter and is playing a major role in the recovery of the real estate market, said Pankaj Kapoor, founder and managing director at property consultant Liases Foras. "This will help tier 2 cities and peripheral markets of tier 1 cities in India, besides the economy and employment."

The increase in outlay will help in starting work on 12 lakh houses and completing 18 lakh homes, Sitharaman said. The government expects it to create 78 lakh jobs.

The increase will help bridge the housing gap in the country to a good extent and is simultaneously an excellent economic growth driver by creating more employment, said Anuj Puri, chairman at Anarock Property Consultants, told BloombergQuint.

The government has approved more than 1 crore homes and released over Rs 76,000 crore in the last five years under the urban leg of the 'housing for all' scheme since its launch.

Also read: Atmanirbhar 3.0: India Announces A New Emergency Credit Guarantee Scheme For Stressed Sectors

As part of the first stimulus package earlier this year, the government had extended the credit-linked subsidy scheme for middle income group under PMAY-U till March 31, 2021.

The liquidity infusion for PMAY-U will be instrumental in achieving PM Modi's vision of housing for all by 2022 and will give the much required boost to demand in the urban housing projects, said Jaxay Shah, national chairman at Credai. “This further comes as a aid to developers who are taking up projects under PMAY Urban and also generate employment in the 230 allied sectors related to realty.”

According to Niranjan Hiranandani, president at NAREDCO, funding issues have been a major challenge for real estate. “Finance Minister Sitharaman’s announcement about additional funding of Rs 18,000 crore for PMAY-U will add to the sparkle this festive season. This is over and above the Rs 8,000 already allotted this year, and will translate into more homes for home seekers, more employment opportunities as also good business for suppliers and industries peripheral to real estate and construction.”

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