Budget 2024: New homes for the poor, dormitories for migrant workers

A man walks past an under construction residential building of Pradhan Mantri Awas Yojana in Ahmedabad, India on July 18 , 2024. Image: Amit Dave / Reuters
 
Constructing houses for lower-income households has been a signature scheme of the Narendra Modi-led government. The first Budget of its third avatar didn’t disappoint those looking for announcements in this area. There were also other proposals that are likely to keep interest in the sector elevated. 

The outlay on homes under the PM Awas Yojana (PMAY) envisages an additional investment of Rs10 lakh crore over the next five years. Central assistance would contribute Rs2.2 lakh crore during this period. The Awas Yojana, which is an interest subvention scheme, provides a reduction in interest of 1 to 3 percent based on the income of the family availing it. Homes under the scheme require prior approval. 

“Under the PMAY scheme, Rs10 lakh crore has been allocated for the development of three crore additional houses. This will drive construction in the urban and rural areas with cascading effect on allied sectors,” says Badal Yagnik, chief executive officer, Colliers India. 

A key pain point for urban migrant workers has been the lack of clean and reasonably priced rental housing options in urban areas. To address this, the government plans to work on setting up hostels in the public private partnership mode. Viability gap funding will also be provided.

Also read: Over Rs 12,000 crore worth of luxury houses sold in Mumbai in six months: Report

Stamp duty payment has been a pain point for buyers of real estate. This ranges between 3 percent and 7 percent. In her Budget speech Finance Minister Nirmala Sitharaman said she would impress upon states to reduce stamp duty for everyone and especially for women buyers. Since this is a state subject, there is little that the central government can do on this count. 

Lastly, the government plans to set up plug-and-play industrial parks in 100 cities. Under the National Industrial Corridor Development programme, 12 industrial parks will be sanctioned. 

The only dampener for the real estate industry came in the form of the withdrawal of indexation benefits for property sales. These sales will now be taxed at 12.5 percent without the benefit of indexation.