PMAY Extension to Significantly Boost Indian Affordable Housing Sector

Mumbai: The Indian Central Government's decision to provide financial assistance for the construction of 30 million additional housing units under the Pradhan Mantri Awas Yojana (PMAY) is set to significantly enhance the supply of affordable housing and move closer to the government’s vision of housing for all.

Economic Multiplier Effect

In its third term, the Modi government’s decision is expected to have a substantial multiplier effect on the economy due to the real estate sector’s extensive linkages with over 250 ancillary industries. The PMAY mission, launched in June 2015, is poised to stimulate economic growth and job creation.

CENTRE TO FUND 30 MILLION ADDITIONAL HOMES

Jaxay Shah, chairman of the Quality Council of India and CMD of Savvy Group, highlighted the benefits of extending the PMAY scheme, noting that real estate, as the second largest employer in the country, will significantly benefit. He mentioned that the scheme would drive job creation and boost economic growth, contributing to broader goals of social equity and sustainable development.

Opening New Markets

Shah added that building new houses in urban and rural areas and enhancing last-mile connectivity through infrastructure projects would open numerous untapped markets, driving further development and investment opportunities. In the interim budget in February, Finance Minister Nirmala Sitharaman announced support for constructing an additional 20 million homes in five years under PMAY-Gram (PMAY Rural). The budget allocation for PMAY increased to ₹80,671 crore for FY25 from ₹79,590 crore in the previous fiscal year.

Financial Support and Achievements

Under the PMAY scheme, the Centre provides financial support to implementing agencies in states and union territories, as well as central nodal agencies (CNAs) to provide houses to all eligible families and beneficiaries. According to the government, over 42.1 million homes have been built under this scheme over the last decade.

Call for Expanded Incentives

Experts are advocating for additional incentives for development companies and buyers through interest rate subventions. Shishir Baijal, CMD of Knight Frank India, suggested that while the government has recognized the need to support users under the scheme, it should also consider expanding the quantum of incentives. He pointed out that the affordable housing segment, which benefits minimally from schemes like PMAY and lower GST rates, has experienced a steady slowdown in demand over the last six quarters due to recent economic pressures.