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Government’s Housing Scheme Can Boost GDP by Rs 15 Lakh Crore: India Ratings


Mumbai: The Centre’s Housing for All initiative is expected to give the economy a boost of Rs 15 lakh crore over the next 7 years, but its success will depend on ramping up existing urban infrastructure, fast-tracking approval process and targeting the actual beneficiary, according to a report by India Ratings.

“The direct benefit of the housing for all scheme to the economy is estimated to be Rs 15 trillion in a seven-year timeframe (FY16-FY22),” said the report prepared by India Ratings.

Funding the sizeable investment through public-private partnerships (PPP) and ramping up the supply of raw materials for construction, namely steel and cement, were cited as “big challenges” for the execution of the scheme.

Municipal services such as supply of piped water, sewerage, sanitation and solid waste management are also not equipped to take on a project of this magnitude in the next seven years, the rating agency said.

The economic impact of the scheme will be felt at the state level, the report noted, adding that the biggest beneficiaries will be Uttar Pradesh, Maharashtra and West Bengal – the states where there is maximum housing demand.

The plan is expected to increase employment opportunities and help grow the services sector, it added.

Allied sectors to construction, such as cement, iron and steel, will also grow depending on the strength of the forward and backward linkages of the construction sector with the rest of the economy.

The Narendra Modi government’s ambitious scheme, aimed at providing 20 million houses in three phases over FY16-FY22, has a Central grant component (Rs 1 lakh per slum household) going to the states, while and Central assistance (Rs 1.5 lakh for other households) is likely to go directly to households, the report noted.

Also, the Central government would provide interest subvention to households at 6.5 per cent for loans up to a 15-year tenor through two nodal agencies – Housing and Urban Development Corporation and National Housing Bank.


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