Government extends PMAY housing loan subsidy for Middle Income Group until March 2021


MUMBAI: The government has extended credit linked subsidy scheme (CLSS) for Middle Income Group (MIG) under the Pradhan Mantri Awas Yojna (PMAY) by one more year until March 2021 in a bid to boost demand for real estate and construction activity.

Separately, finance minister Nirmala Sitharaman also announced the plan to launch affordable rental housing scheme for migrant workers or urban poor under the PMAY.

The decision to extend the scheme by a year is estimated to result in investment worth Rs 70,000 crore in the housing sector, the minister said while detailing the second tranche of Rs 20 lakh crore stimulus package.

Under the scheme, middle income homebuyers with annual income of Rs 6-18 lakhs can avail the benefit of subsidised interest on their home loans. The scheme is aimed at achieving government’s objective of housing for all.

“The extension of CLSS for Middle Income Group is an action oriented reform for the revival of affordable housing segment ensuring job creation, and stimulus to demand and boosting the supply chain,” said Jaxay Shah, Chairman, CREDAI National.

The government had introduced CLSS in June 2015 for home loans to customers from the economically weaker section (EWS), Low Income Group (LIG), and was extended to the MIG since January 2017.

So far, over 3.3 lakh MIG families have benefited under this scheme and additional 2.5 lakh families are expected to be benefitted over the during the financial year 2020-21. The beneficiary gets 3-4 per cent interest subsidy on a loan ranging between Rs 9-12 lakh for a house with carpet area of 1,722-2,152 sq ft, while any additional loan will be at non-subsidized rate.

Under affordable rental housing scheme for migrant workers, the government will be incentivising manufacturing units, industries and associations to build affordable housing complex on their private land. This will be undertaken through Public-Private Partnership (PPP) mode.

“The rental housing scheme under PMAY offers a business opportunity to the private sector, to build more rental housing stock through the PPP mode, with a concessionaire arrangement. The Finance Minister focused on The Finance Minister focused on moves that will improve working conditions, making life easier and more conducive for workers,” said Niranjan Hiranandani, President, NAREDCO.

The government will also be incentivising state government agencies and central government organisations to develop such rental housing complexes and operate.

According to Hiranandani, both the announcements are positive from the migrant workers and urban poor perspective and for the sector, but real est estate as an industry continues to awaits its turn to get stimulus package measures that will create a positive impact.

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