In a country where slums sit cheek-by-jowl with palatial luxury – including what's been reported as the world's most expensive private home – India's unhoused may soon become a more potent economic growth driver.

Prime Minister Narendra Modi's drive to bring homes to the country's 1.3 billion people, rising incomes and the best affordability in two decades will unleash a $US1.3 trillion ($1.8 trillion) wave of investment in housing over the next seven years, according to CLSA India Pvt.

The firm expects 60 million new homes to be built between 2018 and 2024, creating about 2 million jobs annually and giving a tailwind of as much as 75 basis points to India's gross domestic product. The volume of social and affordable housing will rise almost 70 per cent to 10.5 million annually by 2024, exceeding the 33 per cent increase in the premium market.

A luxury residential project in Mumbai. Plans to build 60 million new homes in India, particularly affordable homes, will unleash an estimated $1.8 trillion investment wave. Dhiraj Singh

"The housing sector is at a tipping point and will be the economy's next big growth driver," Mumbai-based analyst Mahesh Nandurkar and his colleagues wrote in a note. "The catalyst is the government's big push for an ambitious housing program."

Modi has been on a mission to expand affordable housing in Asia's third-largest economy. In February, the government granted affordable-housing builders "infrastructure status", making them eligible for state incentives, subsidies, tax benefits and institutional funding. In June 2015, it announced a "Housing for All" program which aims to construct 20 million homes across the country and in December it announced rebates and interest waivers for home loans under the program.