The Union Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24 in the Lok Sabha on February 1, 2023 in New Delhi. Photo Credit: PTI
In a massive boost to affordable housing, the allocation for the PM Awas Yojana (PMAY) was increased by 66% in the Union Budget presented on February 1. Finance Minister Nirmala Sitharaman also announced the Urban Infrastructure Development Fund (UIDF), which will be used to create urban infrastructure in Tier 2 and Tier 3 cities.
PMAY was allocated over ₹79,000 crore this fiscal year as compared to ₹48,000 crore last year. The scheme was launched in 2015 with the objective of providing affordable housing to all citizens. The scheme was created to help the middle-income community, economically disadvantaged groups (EWS) and low-income groups (LIG).
The objective of this Credit Linked Subsidy Scheme (CLSS) is to provide interest subsidy to its beneficiaries for taking loans for purchase or construction of houses.
In her budget speech, the finance minister said states and cities would be encouraged to undertake urban planning reforms and action to transform cities into “sustainable cities of the future”.
“This means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, increased availability and affordability of urban land, and opportunity for all,” she said.
Ms Sitharaman said the Urban Infrastructure Development Fund would be set up through utilization of shortfall in priority sector lending. It will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. The Center will spend Rs 10,000 crore per year for the fund.
“Like the Rural Infrastructure Development Fund, an Urban Infrastructure Development Fund will be set up through utilization of the priority sector debt shortfall,” he added.
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Ms Sitharaman also announced that cities would be encouraged to improve their creditworthiness for municipal bonds. “This will be done through property tax administration reforms and ring-fencing user fees on urban infrastructure.”
All cities and towns will be enabled for 100% mechanical desludging of septic tanks and sewers for transition from manhole to machine-hole mode, he said, adding that more focus will be given on scientific management of dry and wet waste.
Industry bodies welcomed the increase in allocation for PMAY.
Dr. Niranjan Hiranandani, MD, Hiranandani Group and National Vice Chairman, National Real Estate Development Council (NAREDCO) said, “The incremental PMAY allocation of up to Rs 79,000 crore will give a boost to affordable housing and benefit a larger section of homebuyers.”