GOVERNMENT OF INDIA
MINISTRY OF HOUSING AND URBAN AFFAIRS

LOK SABHA

UNSTARRED QUESTION NO. 919
ANSWERED ON FEBRUARY 06, 2020

CONCESSION IN HOME LOAN INTEREST RATES

DR. BHARATI PRAVIN PAWAR
SHRI SADASHIV KISAN LOKHANDE

Will the Minister of HOUSING AND URBAN AFFAIRS be pleased to state:

(a) whether any concession in interest rates on home loans is being provided at Central level to purchase/construct houses in Maharashtra; and

(b) if so, the details thereof and the number of people benefited in this regard in Maharashtra during the last three years?

ANSWER

THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF HOUSING AND URBAN AFFAIRS

(SHRI HARDEEP SINGH PURI)

(a) & (b) Yes, Sir. Government is implementing a Credit Linked Subsidy Scheme (CLSS) as one of the components of Pradhan Mantri Awas Yojana (Urban) [PMAY(U)] to provide interest subsidy for housing loans to eligible beneficiaries. The main featuresof CLSS are at Annexure – I. During the last three years 1,46,638 households have availed benefits under CLSS in Maharashtra.

Annexure – I

Annexure for Lok SabhaUnstarred Question No 919 for 06.02.2020

*Loans beyond this limit will be at non-subsidised rates.

The beneficiary, at his/her his discretion can build a house of larger area but interest subsidy would be limited to first Rs. 6 lakh only

Source : loksabha questions

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The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the increase in the carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for the Middle Income Group (MIG) under Pradhan MantriAwasYojana (Urban).

To further enhance the scope, coverage and outreach of the Scheme, the Cabinet has approved the following:

i. increasing the carpet area in the MIG I category of CLSS from the existing 90 square metre to “up to 120 square metre” and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square metre to “up to 150 square metre”; and

ii. making the above change effective from 01.01.2017 i.e. the date the CLSS for MIG had become effective.

The CLSS for MIG is a pro-active step in meeting the challenges of urban housing shortage. It also is a pioneering step to enable the Middle Income Group to access the benefits of an interest subsidy scheme.

The CLSS for MIG covers two income segments in the MIG viz. Rs.6,00,001 to Rs.12,00,000 (MIG-I) and Rs.12,00,001 to Rs.18,00,000 (MIG-II) per annum. In
the MIG-1, an interest subsidy of 4% has been provided for loan amounts up to Rs.9 lakh while in MIG-2, an interest subsidy of 3% has been provided for loan amount of Rs.12 lakh. The interest subsidy will be calculated at 9% NPV over a maximum loan tenure of 20 years or the actual tenure, whichever is lesser. Housing loans above 9 lakh and 12 lakh will be at non-subsidized rates.

The CLSS for MIG is currently effective up to 31.03.2019.

Impact

· The limit of 120 sq m. and 150 sq m. is seen as a reasonable enhancement and would cater to the market generally scouted by the MIG belonging to the two income categories specified in the scheme.

· The increase in carpet area will enable the Ml category of individuals to have a wider choice in Developers’ projects.

· The increased carpet area will also give a boost to the sale of ready built flats in the affordable housing segment.

Background:

Ministry of Housing and Urban Affairs is implementing the Credit Linked Subsidy Scheme for Middle Income Group (CLSS for MIG) under the Pradhan MantriAwasYojana (Urban) since 1.01.2017 pursuant to Hon’ble Prime Minister’s address to the Nation on 31.12.2016 announcing increased benefits for poor people availing housing loans, and a new interest subsidy scheme for housing loans for the Middle Income Group (MIG).

PIB

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Subsidy of up to Rs.2.60 lakh now available till March, 2019

Centre to look in to concerns of real estate industry to meet affordable housing targets

The central government today announced that the benefit of interest subsidy of about Rs.2.60 lakh on home loans under Pradhan Mantri Awas Yojana (Urban) will now be available for beneficiaries belonging to Middle Income Groups (MIG) fir fifteen more months beyond December this year.

This was announced by Shri Durga Shanker Mishra, Secretary (Housing & Urban Affairs), Government of India, while addressing the ‘Real Estate and Infrastructure Investors Summit’ organized by NAREDCO, in Mumbai today. He said that the government decided to give more time for MIG beneficiaries to avail interest subsidy under PMAY(Urban).

Prime Minister Shri Narendra Modi, in his announcement on the 31st of December last year made applicable the Credit Linked Subsidy Scheme (CLSS) under PMAY(Urban) to MIG, till the end of December this year. Under CLSS, MIG beneficiaries with annual income of above Rs.6.00 lakhs and up to Rs.12.00 lakhs would get an interest subsidy of 4.00% on a 20 year loan component of Rs.9.00 lakhs. Those with annual exceeding Rs.12.00 lakhs and up to Rs.18.00 lakhs would get interest subsidy of 3.00%.

Reiterating the Government’s commitment to meet the Housing for All targets in urban areas by 2022, Shri Mishra urged private investors to invest in affordable housing, being promoted by the Government in a big way with several incentives and concessions.

Shri Mishra later an hour long discussions with a 30 member delegation of NAREDCO and assured them that the Government would look into various issues raised by them in all sincerity and possible interventions would be considered.

The delegation referred to what they called anomalies in GST rates for completed and under construction housing projects, Stamp Duties being higher and kept outside the purview of GST, scarcity of land, delays in granting construction permits, lack of coordination among different municipal agencies, RBI’s high risk weightage for lending to real estate sector despite Real Estate Act coming into force, inadequate bank financing despite Non-Performing Assets in respect of construction being much less than other sectors etc.

The delegation expressed concern over GST and other taxes accounting for over one third of the cost of residential properties.

Minister of Housing & Urban Affairs Shri Hardeep Singh Puri, who addressed the summit yesterday suggested to NAREDCO to have a detailed discussion with Secretary(HUA) for resolving the issues so that affordable housing could be given a boost.

PIB

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