In a recent meeting held on September 20, the Finance Ministry reviewed the capital expenditure for the Ministry of Housing and Urban Affairs. The Finance Minister emphasized that the target for capital spending this financial year must be achieved. This includes fully utilizing the Rs 28,628 crore allocated in the budget for housing and infrastructure projects. The major focus was on the Pradhan Mantri Awas Yojana (PMAY-Urban), a scheme designed to provide affordable housing to the urban population.
Emphasis on Pradhan Mantri Awas Yojana (Urban)
Finance Minister Nirmala Sitharaman, through her official social media post, highlighted the need to accelerate the progress of PMAY-Urban. The scheme is crucial to fulfilling the housing needs of the urban population. Additionally, she stressed the importance of ensuring that funds are utilized for infrastructure projects like Metro Rail and Regional Rapid Transit System (RRTS). With a massive Rs 11.1 lakh crore capital expenditure target for the 2024 Union Budget, which accounts for 3.4% of the GDP, the government is clearly committed to improving urban infrastructure.
Stocks Poised for Growth Amid Government’s Focus
Experts believe the government’s renewed focus on affordable housing will create opportunities for several companies, especially those involved in housing finance. According to a report by brokerage firm Nomura, the biggest beneficiaries are likely to be companies offering home loans for affordable housing. These include major players like Aadhar Housing Finance, LIC Housing Finance, Aavas Financiers, and Home First Finance. These stocks may experience a surge as demand for affordable housing loans increases, driven by the government’s push.
Cement and Infrastructure Stocks to Benefit
With the government’s strong emphasis on PMAY-Urban, the demand for cement is projected to rise significantly, potentially reaching 179 million tonnes by FY30. To meet this growing demand, cement companies are expanding their production capacities. Industry giants such as UltraTech Cement, Ambuja Cement, and Shree Cement are well-positioned to capitalize on this increased demand for building materials.
Additionally, infrastructure companies stand to gain from the government’s aggressive capital expenditure. Companies like Larsen & Toubro (L&T), known for their expertise in large-scale infrastructure projects, are expected to see growth opportunities. Urban transport development projects, such as those spearheaded by Dilip Buildcon, could also receive a boost from the government’s continued focus on improving public transportation systems.
This focus on affordable housing and urban infrastructure is expected to not only uplift these sectors but also contribute to economic growth by generating employment and improving urban living standards.
