The budget has allocated ₹30,170.61 crore under the Pradhan Mantri Awas Yojna (PMAY)–Urban for this fiscal, a 36.5 per cent higher provision than the Centre had actually intended to spend, according to the revised estimate.

The budget document shows that the Centre had spent ₹28,652.74 crore under PMYA-Urban in FY23.

However, the expenditure under this head, which is aimed at providing pucca houses to urban poor, came down to ₹22,103.03 crore in FY24, according to revised estimate.

On Tuesday, finance minister Nirmala Sitharaman announced the Centre is going to spend ₹2.2 lakh crore in the next five years under this scheme.

“Under the PM Awas Yojna 2.0 housing needs of 1 crore urban poor and middle class families will be addressed with an investment of ₹10 lakh crore. This will include central assistance of ₹2.2 lakh crore in the next five years. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged,” Sitharaman said in her budget speech.

The real estate sector said that the budget announcement will translate to “marginal benefit”. Anuj Puri, chairman of Anarock Group, a real estate consultancy, said the sector had hoped for more in the budget.

However, Samantak Das, chief economist of JLL, said the PMAY allocation would support the affordable housing sector. This segment has been the backbone of the real estate industry over the last few years.

The affordable homes category (under ₹40 lakh) has been seeing a decline in overall sales since the pandemic, to approximately 19 per cent in H1 2024 from over 38 per cent in the period before the pandemic in 2019, according to Anarock. Consequently, this segment’s percentage share to the total housing supply in the top seven cities also fell to 18 per cent in H1 2024 from nearly 40 per cent in 2019.

The budget also announced that the Centre would come out with enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability going forward.

Commenting on the budget provisions, Sanjay Jain, managing director of Siddha Group, said the proposal to provide rental housing for industrial workers through PPP model will involve the industrial houses who will share the burden of cost with the government to provide housing to industrial workers, thereby providing a good housing atmosphere and enabling the children of the workers for a better life.

Sushil Mohta, chairman of Merlin Group, said the budget’s emphasis on cities is noteworthy. “We welcome the decision to establish industrial parks in over 100 cities in partnership with the private sector,” he said.