In response to recent electoral setbacks and rural economic challenges, the Indian government has planned a significant increase in rural housing and infrastructure spending. The proposal includes over INR 550 billion (USD 6.58 billion) for housing subsidies, aiming to build 20 million houses under the PM Awas Yojna (Rural). Additional investments in village roads and job creation programs target economic stimulation in rural areas, with a potential total investment of INR 4 trillion (USD 47.89 billion) over the next few years. Finance Minister Nirmala Sitharaman is expected to unveil detailed plans in the upcoming budget, emphasising a strong commitment to rural development and economic growth.
The Indian government is planning a significant increase in spending on rural housing in the upcoming budget. This comes after setbacks for Prime Minister Modi's party in recent elections and growing concerns about rural economic distress.
The planned hike in housing subsidies is part of a larger push to boost spending on rural infrastructure. This includes village roads and a jobs program aimed at helping an estimated 20 million young people stuck in the agricultural sector. With limited manufacturing jobs available, this initiative aims to create opportunities and stimulate the rural economy.
If approved, this would be the largest annual increase in federal spending on the rural housing program since its launch in 2016. It reflects the government's concern about rising food inflation and stagnant farmer incomes, both of which are contributing to economic hardship in rural areas.
Under the PM Awas Yojna (Rural) scheme, the government aims to build an additional 20 million houses in rural areas over the next few years. This ambitious target comes after successfully providing assistance for over 26 million homes for poor families over the past eight years.
Finance Minister Nirmala Sitharaman is expected to reveal details of the plan during the budget presentation later this month. Experts anticipate a substantial increase in allocations for various rural development programs, including housing, roads, and employment initiatives.
Government sources suggest that federal subsidies for rural housing could exceed INR 550 billion (USD 6.58 billion) this year, up from INR 320 billion last year. Additionally, spending on the rural jobs program is also expected to rise significantly, with details potentially being presented later for parliamentary approval.
Economists and industry leaders have urged the government to increase rural spending to boost consumer demand in these areas. They point out that private consumption growth in rural areas is lagging far behind the national economic growth rate of nearly 8%.
The potential total investment for building 20 million houses could reach INR 4 trillion (USD 47.89 billion) over the next few years. The federal government is expected to contribute around INR 2.63 trillion of this total, with the remaining funds coming from state governments.
While details are still being finalised, this initiative signals a strong focus on improving the lives of people in rural India. By creating better housing options, improving infrastructure, and offering job opportunities, the government hopes to address rural economic distress and stimulate growth in these areas.
Advertisement
Facebook
Whatsapp
