The PM's Pradhan Mantri Awas Yojana will lead to more demand for affordable projects in Pune. Prime Minister Modi's vision to create housing for all by 2022 has been initiated with policy initiatives and is also supported by budgetary initiatives such as the labeling of affordable housing as infrastructure. Within India, the real estate sector is the second largest employer after agriculture and the real estate sector is expected to expand by 30 percent by the end of the next decade. However currently the realestate in India has been facing challenges such as unpredictable cash flows, low sales volume, delayed completion timelines, and a higher rate of interest charged by banks on loans to builders.
The Pradhan Mantri Awas Yojana
The PMAY provides a reason to cheer as it is expected to create demand for housing in India and will lead to the fulfillment of the housing shortage in the country; particularly in meeting demand for affordable housing in India.
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PMAY, Affordable Housing, and Builders
Under the module laid out by the PMAY, the carpet area of houses that are being created for the Economically Weaker Sections is to be 30 square meters while the carpet area of houses for Low Income Groups is to be 60 square meters. The carpet area of houses for MIG 1 and 2 is to be 90 and 120 square meters respectively. Within the four metropolitan cities a carpet area of 30 square meters has been capped for houses while in the peripheral regions of cities this area for houses has been increased to 60 square meters.
Builders and developers in Pune and those across India who construct affordable housing will be exempt from paying tax on profits from such properties for a period of five years from the current exemption period of three years.
Housing in Pune
Nearly eighty percent of the housing demand in Pune comes from lower income group and middle income group households. In Pune the major driver for housing is job creation which in turn is supported by strong industrial growth in Pune in locations such as Chakan, Talegaon, Ranjangaon, all three of which have industries present operating under the aegis of the Maharashtra Industrial Development Corporation (MIDC). The professionals who are employed in these industries are the ideal customers of builders in the city.
Individuals who work in Pune in the IT and ITES companies in clerical profiles are the best suited to benefit from the PMAY scheme in Pune. Additionally those employed as taxi drivers and small traders would also benefit from the scheme mentioned and will be able to buy property in Pune.