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Budget 2024: Will Modi Government Drive Housing Growth?

The Indian government is expected to announce an additional sum for construction of affordable houses under housing schemes.

Budget 2024: Will Modi Government Drive Housing Growth?
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Budget 2024: Will Modi Government Drive Housing Growth?

With Finance Minister Nirmala Sitharaman set to present the 2024 Budget on July 23 in Parliament, the Narendra Modi government is reportedly planning a significant boost to the housing sector.

As the Budget is on the horizon, all eyes are now on the affordable housing sector.

The Indian government is expected to announce the construction of an additional 3 crore affordable houses under both Urban and Rural housing schemes.

Additionally, the government may allocate Rs 50,000 crore to Rs 60,000 crore for a new housing scheme aimed at the urban poor and middle-class population.

In the Interim Budget 2024-25, presented in February 2024, the finance ministry allocated Rs 80,671 crore for a new housing scheme, up from Rs 79,590 crore in the 2023-24 Budget.

There is also a possibility that the government will provide interest subvention benefits to the urban poor and middle class, potentially offering homebuyers up to 6% benefits under the new scheme.

To meet the demands from states for increased budget allocations for the PMAY-Rural scheme, the government may increase the overall allocation by 15-20 percent.

With the presentation date approaching, the finance ministry has begun preparations for FY 2024-25 Budget.

The BJP government at the Centre initiated the PMAY mission in June 2015 with the aim of providing affordable housing to all.

As part of the program, all qualifying families and beneficiaries receiving housing through Central Nodal Agencies (CNAs), states, and Union Territories (UTs) will receive central financial support from the government.

In addition to the affordable housing segment, real estate industry players are expecting the government to provide tax incentives to home buyers and investors.

To boost the sector, stakeholders in real estate are demanding that the government increase the deduction limit for interest payments on home loans to Rs 5 lakh per year from the current Rs 2 lakh.

They also expect the government to reduce GST rates and provide interest subsidies to first-time homebuyers in the 2024 Union Budget to make home purchases more affordable.

Divya Shivaji
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