The Pradhan Mantri Awas Yojana (PMAY-Urban), initiative of the Indian government, has been making progess in providing affordable housing since its inception in mid-2015. The scheme, which aims to provide housing for all by 2022, has been instrumental in developing large mass housing projects using adaptable, sustainable, and low-cost construction technologies.

As of January 20, 2025, the Ministry of Housing and Urban Affairs has sanctioned 118.64 lakh homes under the PMAY-Urban scheme. Of these, nearly 90.22 lakh units have been completed, and approximately 112.50 lakh have been ‘grounded’. The financial commitment from the central government towards this initiative is nearly Rs 200,000 crore.

Anuj Puri, Chairman of the Anarock Group, emphasized the need to increase the accessibility of PMAY to more people and raise awareness about the scheme. He highlighted the importance of the interest subsidy on home loans and direct subsidy for individual house construction or enhancement, which are key aspects of PMAY.

Puri also expressed his anticipation for the Union Budget 2025-26, stating that any announcements to affordable housing would undoubtedly involve PMAY. He stressed the need for creative solutions and strong political will to bring this vitally important programme back to centre stage.

The rising prices in the real estate market have led to a gradual tapering down of luxury housing. This could trigger an inflection point where the cycle can once again turn positive for the affordable segment, particularly for units priced under Rs 40 lakh. Any substantial announcement for the affordable housing segment in the upcoming Union Budget could strengthen this trend and give affordable housing a much-needed boost.

Puri further added that even if such measures don’t initiate a full-blown revival, they can at least improve the segment’s overall prospects. He emphasized that a healthy housing market should cater to a broad range of buyers and not favour just one segment.

The demand for housing has changed considerably after the pandemic, with Indians now preferring larger and multi-functional homes with a comprehensive spread of lifestyle amenities.

In the past, similar initiatives have been taken by the government to boost the real estate sector. For instance, the Smart City Mission launched in June 2015 aimed to enhance infrastructure, quality of life, and sustainability. In Gujarat, 354 projects worth over Rs. 11,455 Cr were initiated under this mission, with 338 projects worth Rs. 10,793 Cr completed and 16 projects worth Rs. 662 Cr ongoing.

The upcoming Union Budget 2025-26 is expected to continue the government’s emphasis on rural development, with a projected 5-8% year-on-year increase in allocations for key rural development schemes. This fiscal year, the rural development ministry’s budget stands at Rs 1.78 lakh crore, reflecting a 3.8% increase from the previous year.

The government is also considering cutting income tax for individuals making up to Rs 15 lakh a year in Budget 2025 to provide relief to the middle class and boost consumption. This move, along with the potential announcements to affordable housing, could significantly impact the real estate sector and the economy at large.