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Budget 2020: Fund allocation for housing sector up 18.39%

CLSS scheme has now been extended until March 31, 2022

Budget 2020 saw the Housing and Urban Affairs Ministry outlay touch Rs 50,039.90 crore, a nearly 18.39 percent increase from the revised estimate of Rs 42,266.72 crore for 2019-2020.

In 2020, the outlay for the flagship scheme of the government – the Pradhan Mantri Awas Yojana – has been granted Rs 27,500 crore as against the revised estimates of Rs 25,328 crore in 2019-2020, nearly an 8.5 percent increase.

The government in 2020 has allocated Rs 13,750 crore for the Smart Cities Mission and AMRUT for 2020-2021 against Rs 9,842 crore in 2019-2020, which is about 40 percent more than the amount set aside last year.

Under the SCM, 100 Smart Cities have been selected in four rounds based on an all India competition. All 100 cities have incorporated Special Purpose Vehicles (SPVs).

Since the launch of the mission, a total of 5,151 projects have been identified for implementation by the cities worth more than Rs 2 lakh crore which are in various stages of implementation in the 100 cities.


The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme that is targeted at upgrading urban infrastructure across 500 towns and cities.

The Metro has received an allocation of Rs 17,482 crore, a .73 percent decrease from the revised estimates of Rs 17,612 crore last year.

In 2019, the Delhi Metro Rail Corporation (DMRC) had been given Rs 414.70 crore grant as against Rs 50 crore in 2018-19. This was almost an eight-fold increase.

The Housing for All by 2022 initiative was launched by the Modi government within five months of assuming office. It’s all about ensuring a home for every Indian by 2022. To boost affordable housing and achieve the vision of Housing for all by 2022, the government (Central and State) have undertaken several initiatives, such as Pradhan Mantri Awas Yojana (PMAY) that aims to build 1 crore homes in urban and rural India by 2022.

Affordable housing has also been accorded infrastructure status, ensuring that developers in this segment have access to cheaper loans.

The Credit Linked Subsidy Scheme for the Middle Income Group (CLSS for MIG) was announced by Prime Minister Narendra Modi on December 31, 2016 and was earlier extended twice till March 2019. The government in the last week of December 2018 extended the interest subsidy scheme till March 2020 for first time urban home buyers who have annual income between Rs 6 lakh and Rs 18 lakh.

The carpet area of a housing unit was initially revised to up to 120 sq m and up to 150 sq m  for MIG I and MIG II respectively in November, 2017 and further enhanced to up to 160 sq m and up to 200 sq m for MIG I and MIG II, respectively in June, 2018.

As per data shared by ministry of urban affairs and housing, out of a validated demand of 1.12 Cr houses in urban areas, 1 crore houses have already been sanctioned under PMAY (Urban). Further, a total of 57 lakh houses are in various stages of construction of which, nearly 30 lakh houses have been completed.

The houses sanctioned so far under the Mission involve an investment of about Rs. 5.70 lakh crore with Central assistance of Rs. 1.6 lakh crore. The Central Government is contributing Rs.1.00 lakh to Rs.2.67 lakh for each house under different verticals of the scheme.

As on date, nearly Rs. 60,000 crore of Central Assistance has already been released. Presently, works of about Rs. 3 lakh crore is ongoing and by the time Mission accomplishes its target of 1.12 crore houses, the entire activity will trigger an investment of more than Rs. 7 lakh crore.

In order to supplement the additional requirement of providing the Central Assistance, over and above the budgetary support, Government had made a provision for raising Extra Budgetary Resources (EBR) to the tune of Rs 60,000 crore of which, Rs 38,000 crore have already been raised and disbursed. The government has also created an Affordable Housing Fund (AHF) worth Rs 25,000 crore has been set up to aid stuck housing projects.

The Credit Linked Subsidy for the Middle Income Group (MIG) was introduced for the first time in the housing sector with effect from 1 January 2017. The MIG beneficiaries with annual income upto Rs. 18 Lakh are eligible for claiming interest subsidy on their housing loans. For the MIG, the Government has increased the area of house up to 200 sq m. The government has developed a web based real time monitoring system called CLSS Awas Portal (CLAP) to ensure peoples’ participation and transparency leading to efficient delivery and minimising grievances.

Land is the biggest challenge for implementing this scheme. Its current shortage in major city-centric areas prevents the development of affordable housing in areas where it is most direly needed. The cost of land currently accounts for as much as 30-50 percent of the cost of a project within city limits. However, RBI regulations do not allow banks to fund land purchase.
Vandana Ramnani
first published: Feb 1, 2020 07:08 pm

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