Sitharaman may focus on affordable housing in Union Budget: Former HDFC CEO Keki Mistry

BUDGET 2024: Finance Minister Nirmala Sitharaman is likely to focus on policies around affordable housing in the upcoming Union Budget, former HDFC CEO Keki Mistry told ETNow in an interview recently.

"I think the focus will be on affordable housing in my opinion and there will some scheme or the other that will come up for the affordable housing segment," Mistry said.

"If you remember in the olden days I think it was in 2015 or 2016 the government had this scheme of the CLSS scheme, credit linked subsidy scheme where if you were a first time home buyer and you were buying a property of up to a certain size, then you were entitled to some amount of concession or subsidy from the government," Mistry said.

"I think something like that now whether it is in the form of a subsidy or not I do not know but something of that sort will come for the real estate sector to encourage the lower income people to be able to buy out," Mistry added.

Real estate Budget 2024 expectations

Real estate developers are pushing for several key measures in the upcoming Union Budget to bolster the sector’s growth. They seek the rationalization of taxes, additional funding for the Special Window for Affordable and Mid-Income Housing (SWAMIH) scheme, and continued government support for affordable housing initiatives to stimulate demand and sustain industry momentum.

Research firm Jefferies in a note said that upcoming Union Budget 2024, which is likely to be announced in the second half of July, is expected to be a boon for several domestic sectors. Industries such as affordable housing, capex-related businesses, consumer goods, and rate-sensitive sectors stand to benefit significantly.

"The government's efforts on 'Housing for All' have been yielding positive results and this initiative has supported affordable housing over the last decade. A review of terms related to affordable housing needs to be undertaken now to ensure more homebuyers get the benefit of these projects," said Jaxay Shah, CMD, Savvy Group.

He said the definition of affordable housing, which was capped at ₹45 lakh in terms of cost, was accorded in 2017, and this needs to be reviewed as realty prices have risen in the past seven years due to inflation.

In the interim budget earlier this year, Finance Minister Nirmala Sitharaman pledged support for constructing an additional 20 million homes over the next five years under the Pradhan Mantri Awas Yojana - Gramin (PMAY-Rural). The allocation for PMAY was increased to ₹80,671 crore for 2024-25, up from ₹79,590 crore in 2023-24.