According to Fitch Solutions, the demand for housing and supportive government policy will lead to a strong rebound in 2021 and a robust growth in India’s residential and non-residential construction industry over the next decade. Fitch forecasts the industry to expand in real terms by 7.9% in 2021, followed by average yearly growth of 6.5% up until 2030. Government support for the housing sector is evident in the 2021 national Budget, which allocated Rs 50,000 crore to the Ministry of Housing and Urban Development (MoHUA) and created a 3.5 billion dollar (about Rs 25,300 crore) fund to support the completion of stalled housing projects. The Pradhan Mantri Awas Yojana (PMAY) programme, which aims to provide affordable housing to all urban poor by 2022, is also expected to be a key driver of growth. In addition, the Smart Cities Mission, an urban renewable programme designed to build new infrastructure to improve management and safety, will benefit from considerable funding in the 2021 national Budget. Moreover, potential reforms to the Foreign Direct Investment (FDI) system in regards to housing could present upside risk to Fitch’s outlook for residential building in the market. (ANI)
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