The Centre is mulling ‘all options’ including the possibility of interest subvention, as it looks to come up with a scheme targeting housing for the middle class, specially those living in rented houses or unauthorised colonies.

According to Finance Secretary TV Somanathan, various options, including interest subvention, are being explored for the upcoming scheme.

“All options are on the table. The contours (of the scheme) are being finalised and interest subvention is one of the options,” he said.

Announcing the Interim Budget 2024-25, Finance Minister Nirmala Sitharaman said the Centre would “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”. Scheme details were not announced, though.

It is presumed that the move towards own homes in this “middle class segment” is likely to free encroachment areas, like slums, and make them available for re-development, as per market sources.

Push for Prime Minister Awas Yojana

India would look to continue its push towards housing for all, specially targeting the rural households. Some two crore new homes will come up over the next five years under the PM Awas Yojana (Grameen), in addition to the targeted 3 crore households. Total households under PMAY – Rural will be up to five crore.

“Despite the challenges due to Covid, implementation of PM Awas Yojana (Grameen) continued. And we are close to achieving the target of three crore houses. Two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families,” Sitharaman said during her Budget speech.

The PMAY-Grameen has been allotted ₹54,500 crore (almost at par with last year’s Budget Estimates of ₹54,487 crore) and 70 per cent up over last year’s revised estimated of ₹32,000 crore.

The proposed allocation for PMAY – Urban, the other flagship central scheme targeting housing for urban population, in the Interim Budget is ₹26,170 crore, up 18 per cent over revised estimates of FY24 to the tune of ₹22,103 crore. Budget estimates in the category were pegged at ₹25,103 crore last fiscal.

According to Anuj Puri, Chairman, ANAROCK Group, the push towards PMAY (Grameen) “will benefit real estate growth in not just the top cities but in tier 2 & 3 ones too.”