The housing and urban affairs ministry is looking to find more allocation for two of its flagship programmes—PM Awas Yojna (PMAY) in urban areas and the Smart City Mission.
It is expected that the budgetary allocation for PMAY might be increased by 12%, and the ministry is hopeful that the Centre will allow it to take loan of at least Rs 25,000 cr to meet the stiff target of sanctioning 20 lakh housing units during 2018-19.
High investment in housing for the poor and middle income groups in urban areas has the potential to push construction activities and create employment. Job generation is one of the key challenges that government is facing before the next general election scheduled in early 2019.
Since the launch of PMAY (urban), about 37 lakh houses have been sanctioned and 15 lakh of them have been grounded. To pay the instalments of the interest subsidy of units which have already been started and to release fresh instalments of the 20 lakh houses we plan to sanction next fiscal, the ministry needs at least Rs 25,000-30,000 cr. The government may have to allow for taking 10-15 years loan from fund raising entities.
There are indications that the budgetary allocation for PMAY may increase close to Rs 6,700 cr against Rs 6,057 cr in 2017-18. According to rough estimates, the housing ministry will need at least Rs 1 lakh cr in the next two-three years for meeting its target to provide assistance to the poor under the PMAY.
There are also indications that the allocation for Smart City Mission may also increase by more than 50% for the next fiscal as Centre needs to release more fund to the special purpose vehicles (SPVs), which have been established to execute the projects. During 2017-18, the allocation was about Rs 4,000 cr and for the next fiscal it may increase up to Rs 6,300 cr.
Another flagship programme to improve the infrastructure in cities under AMRUT is also likely to see about 20% increase in the central allocation for 2018-19.