Expectations for the budget: The establishment of the Urban Infrastructure Development Fund (UIDF) under the National Housing Bank for the development of urban infrastructure in Tier 2 and Tier 3 cities was announced by Union Finance Minister Nirmala Sitharaman in her 2023–24 Budget speech. According to a report on ET Now, there is talk even this year that the corpus under the National Housing Bank for affordable housing may be increased once more to address the problems the mid-tier cities are facing.
The urban infrastructure development fund would be used by public agencies and controlled by National Housing Bank, according to FM Sitharaman, who presented the Union Budget 2023. "We expect to make available Rs 10,000 crore per annum for urban infra development fund," she added. States would still be able to obtain 50-year loans with no interest, she said.
After a two-year moratorium period, the principal amount of the loan will be repaid in five equal annual installments over the course of seven years. Interest will be paid on a quarterly basis. According to a previous Reuters article, FM Sitharaman is expected to increase funding for affordable housing by about 15%, from Rs 790 billion to Rs 1 lakh crore for 2024–2025. With an initial capital of Rs 10,000 crore, the UIDF was established in July 2023 to support state government initiatives by offering a steady and predictable source of funding for the development of urban infrastructure in Tier 2 and Tier 3 cities.
Currently included under UDIF are as many as 459 tier-2 cities with a population of 50,000 to less than a lakh and 580 tier-3 cities with a population of one lakh to less than a million as per the 2011 census. In order to encourage low-cost and inexpensive housing, India Inc. has also requested that the government expand the interest subvention plan to cover the entire cost of housing up to Rs 35 lakh, up from Rs 25 lakh at the moment.
The budget for affordable housing, which was previously set at Rs 45 lakh, needs to be changed, according to CREDAI. Over the last seven years, real estate values have risen significantly only from inflation. According to data cited by the National Housing Bank (NHB), housing costs in India have increased by 24% since June 2018. As a result, developers find it exceedingly difficult to comply with the present restriction of Rs 45 lakh.
Therefore, CREDAI suggests that the definition of affordable housing be changed to read as follows: "a unit with 90 square meters of RERA carpet area in metro areas and 120 square meters in non-metros without a cap on the unit's cost."
The goal of the June 2015 launch of the Pradhan Mantri Awas Yojna was "housing for all." December 2024 was designated as the scheme's deadline. However, according to speculations, the NDA administration may decide to continue the programme for a further three to five years if this goal is not met. The central government provides interest-cost subsidies, ranging from Rs 1 lakh to Rs 2.67 lakh, to households that obtain bank loans for the construction of homes as part of the housing initiative. This is in addition to state government subsidies.
According to information presented in the Parliament during the winter session in December, the government has so far spent close to $29 billion under the project over the last five years. In the Solapur district of Maharashtra, earlier this month, Prime Minister Narendra Modi gave 15,024 houses to individuals from economically disadvantaged backgrounds, such as unorganized laborers, textile and beedi workers, construction workers, ragpickers, and garment workers. Under the Pradhan Mantri Awas Yojana - Urban (PMAY-U) initiative, this is the largest affordable housing project in the world.
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