Budget 2024: According to two government sources, India intends to increase state subsidies for rural housing in the upcoming Union Budget 2024 by 50% or more than $6.5 billion over the previous year following the Bharatiya Janata Party’s (BJP) electoral setbacks.
The report stated that if approved, this financial year would represent the biggest yearly increase in federal spending on the rural housing program since the program’s launch in 2016. Finance minister, Nirmala Sitharaman, is supposed to share the details of the plan during her budget 2024 presentation this month.
The planned increase in housing allowances comes as part of a broader government initiative geared towards enhancing spending on rural infrastructure like village roads and job programs for a few million young people impeded in the agriculture sector due to scarce manufacturing job opportunities.
If approved, it would be the program for rural housing with the largest-ever increase in central spending since it was started in 2016.
One of the government sources with knowledge of budget deliberations stated, “The government is concerned about the widespread economic misery in rural areas, which is being caused by increasing food inflation and slow growth in farmers’ earnings.
In response to a Reuters article showing that Housing and Urban Development Corporation(HUDCO) shares increased up to 9%, This report has pushed the shares of Aadhar Housing Finance and GIC Housing Finance by 4.5% each.
The opposition’s better-than-expected showing in last month’s hotly contested national election has left Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) reliant on its allies for the first time in ten years.
Before this, in just eight years, the government supported building over twenty-six million dwellings meant for needy families. Still, now under the PM Awas Yojna (Rural) program new plan is to enable the construction of twenty million extra units within a few years.
Finance Minister Nirmala Sitharaman is expected to reveal the strategy’s specifics later this month during the budget 2024 announcement.
The government’s second source predicted higher funding in Budget 2024 for several rural projects this year, including housing, roads, and employment initiatives. It stated that central rural housing grants might exceed Rs. 550 billion, up from Rs. 320 billion in the previous fiscal year.
He stated that although state spending on the rural jobs program was anticipated to rise significantly from a previous estimate of ₹860 billion, the administration might not ask parliament for approval of this increased spending until later and instead include it in the budget 2024.
He stated that in addition, a different plan to increase village road spending from previous estimates of ₹120 billion in the current fiscal year was being considered.
Both the sources talked in anonymity, about the provision that they would not like to disclose their identity, as they weren’t authorized to reveal anything about plans on Budget 2024 to the media.
Private consumption was growing at a rate that was half that of the annual GDP growth, or about 8%, according to pre-budget discussions. Business executives and economists asked the government to increase rural investment in Budget 2024 to boost consumer demand.
According to the sources, during the next five years, the central and state governments are likely to set aside up to ₹4 trillion, with the central government providing approximately ₹2.63 trillion, to build 20 million residences for the impoverished in rural areas.
When questioned about expenditure plans, spokespeople for the finance ministry remained silent.
Last month, a few days after getting into the office the cabinet of Mr. Modi released plans to aid in the building of thirty million houses in both rural and urban areas without disclosing the financial details.
The second official stated that the Ministry of Rural Development has suggested raising state subsidies to approximately ₹2,00,000 rupees per housing unit, up from ₹1,20,000 rupees earlier, citing growing raw material costs.
To Sum Up on Plans for Budget 2024:
- The Modi Government has a plan to increase rural housing subsidies by 50% in the upcoming Budget of 2024
- If approved, the largest yearly increase in funding for rural housing is anticipated.
- Under PM Awas Yojana aims to build 20 million homes (Rural)
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