Important Policy Revisions Fueling Affordable Housing Projects in Gurugram

 The government has taken a noble initiative of “Housing for All” with Pradhan Mantri Awas Yojana (PMAY). It’s mission is to house 20 million families by the end of 2022 and for that purpose, it has put in motion several policies that boost the supply and demand of affordable homes. To make PMAY a success both the center and state governments have to work together and so far they have been coordinating to do marvels in the real-estate sector. In this blog, we’ll consider the amendments to the 2019 budget and the recent changes in the Haryana Affordable Housing Policy which will bolster affordable housing projects in Gurugram.



In July 2019, the government in its annual budgetary meeting announced that it will be offering a deduction of interest up to Rs. 1.5 Lakhs on loans availed for affordable housing. However, due to the unforeseen damage incurred by the pandemic, a further boost became imperative for the affordable housing sector. As an amendment in 2021, the Finance Minister proposed that the eligibility of this deduction be increased by one year, i.e. up till March 31, 2022. Moreover to encourage the supply of affordable homes the finance minister has withdrawn tax obligations on developers for another year. These tax exemptions were also offered to specific affordable rental housing projects to support migrant workers. These decisions also ensure an increase in demand for affordable housing projects making the affordable real-estate sector more lucrative for developers. Furthermore, debt funding through REITs would help in attracting more investments in the real estate sector, and by exempting dividend payments to REIT from TDS retail investors will be encouraged to explore investment opportunities in REITs.


However, many developers were disappointed in the changes and had hoped for important proposals that would’ve effectively fueled their industry. Some of the proposals they had hoped for included:

  • Permitting 100% Foreign Direct Investment (FDI) in housing projects that have been completed.

  • Allocation of increased funds under Special Window for Affordable & Mid-Income Housing (SWAMIH).

  • Setting up a better approval system like a single-window clearance system.

  • Building materials for projects get a reduction in Goods and Service Tax (GST) on building materials

  • Giving more incentives to states to rationalize stamp duty

  • Cheaper steel and cement price rates for construction of homes.


In a webinar organized by NAREDCO, a body of realtors, the Secretary of Housing and Urban Affairs did assure developers that there will be a further revision in the policies. They can at least expect 6-9 months of timeline extension on the completion of projects. The representatives of NAREDCO raised many demands and requested revisions in the RERA act. The secretary of Housing and Urban Affairs heeded to these demands and highlighted the success of PMAY in establishing 100 smart cities and 1.12 crore houses in the past seven years under Pradhan Mantri Awas Yojana. The secretary also informed that India has improved in ranking from 186 to 27 when it comes to ease in construction. He further added that with rapid urbanization India is set to become a USD 1-trillion industry. Emphasizing on the importance of affordable housing, he reiterated that the highest demand comes from the Economically Weaker Section (EWS) and the Low-Income Group (LIG), and mentioned how even millennials are also interested in 2-3 BHK flats. He stated that the real-estate business contributes 7% percent to the GDP and will continue to contribute more in the future.


Affordable housing in gurugram has also seen some policy revisions that will boost the demand and supply of affordable homes. One of the biggest developments is the addition of mandatory and non-chargeable car parking spaces for the residents which is a huge plus point for residents struggling with car parking space in affordable housing projects. People require a secure spot to park their cars without the fear of their car getting towed or without wasting their time looking for a suitable space that doesn’t cause a public nuisance. The revised policies have also increased the allocated space for these affordable housing projects to a maximum of 30 acres. This not only encourages developers to create more affordable housing projects but also increases the number of flats that a project can contain, contributing to the PMAY objective of  “Housing for All”. The commercial component in affordable housing projects has also been increased from 4% to 8% which will incentivize developers to invest in affordable housing as the commercial component in these projects helps them make profits. The commercial component will also come as a welcome boom for the residents due to the restrictions in place due to COVID-19.


In conclusion, the government has been working closely with developers to realize the mission to build a house for every family in India. The mission has not only fueled the Indian economy but has also given a decent home to many economically weak families. It is commendable to see that affordable housing projects in gurugram and otherwise have withstood the challenges of the pandemic and continue to thrive.

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