Budget 2024: What The Proposed Housing Scheme For Middle Income People Means

The government plans to launch a scheme for deserving sections of middle income people living in rented houses or slums, Finance Minister Nirmala Sitharaman announced during the budget 2024 speech on Thursday.

"Government will launch a scheme to help deserving sections of the middle class living in rented houses, or slums, or chawls and unauthorised colonies to buy or build their own houses," she said.

The central government also aims to make another 2 crore houses in the next five years under the PM Awas Yojana (Grameen), which is close to achieving the target of 3 crore houses.

Around 2 crore additional houses will be taken up in the next five years to meet the requirement arising from increase in the number of families, she said.

The announcements related to the housing scheme will cater to growing demand and aid the 'Housing for All' mission, according to industry players.

Housing for middle class is likely to free encroachment areas like slums for easier redevelopment, said Anuj Puri, chairman, Anarock Property Consultants Pvt.

"The proposed boost to housing for the middle class living in sub-par accommodation is a welcome inclusion," said Shishir Baijal, chairman and managing director, Knight Frank (India) Pvt. "We look forward to the details of this, as we expect this to have great long-term ramifications."

The government enhanced the outlay for Prime Minister Awas Yojana. The budget estimates for FY25 for PMAY stands at Rs 80,671 crore, as compared with FY24 budget estimates of Rs 79,590 crore for the "housing for all" initiative of the government.

"Sustained focus on infra development under PM Gati Shakti Mission, increased rail and road connectivity to tier-2 and 3 cities will further housing sector growth and development. However, as the tax rates remain unchanged, the common man will not have additional money in his pocket, which may be a deterrent on the spending capacity of taxpayers," said Boman Irani, president of CREDAI National.

No announcement was made for boosting allocations for schemes like PMAY (Urban) to improve affordability and encourage new projects in this segment, which was a key expectation.

"No major announcements appeared in the affordable housing segment. However, the upcoming Union Budget (in July, after elections) might hold more concrete measures addressing industry concerns and potentially impacting market trends," said Puri of Anarock.

The government needs to do more to boost consumption at the bottom of the pyramid, according to Nadir Godrej, chairperson of Godrej Agrovet Ltd.

"Fiscal consolidation is good, but it's very important to focus on spending. If we’re spending on the right things, nothing is lost, so we shouldn’t focus on a smaller deficit," he said.

"More people are engaging in agriculture, rather than value-added rural jobs. Every likelihood that interest rates will come down, and people will be willing to spend more," Godrej said.