The Union Cabinet chaired by the Prime Minister Narendra Modi has approved a new scheme for promotion of Rural Housing in the country. The Government would provide interest subsidy under the scheme, which would be available to every rural household who is not covered under the Pradhan Mantri Aawas Yojana (Grameen) or PMAY.
The approved schemes would enable people in the rural areas to construct new houses or add to their existing houses to improve their dwelling units. Under the scheme, if any person takes a loan, they would be provided interest subsidy for loan amount up to Rs. two Lakh as per the National Housing Bank.
The Government would provide net present value of the interest subsidy of three percent to the National Housing Bank upfront which will, in turn, pass it to the Primary Lending Institutions (Scheduled Commercial Banks, NBFCs etc.).
As a result the equated monthly installment or EMI to be paid by the person availing the loan reduces. Also, the scheme would enable necessary steps for proper convergence with PMAY-G, in terms of providing technical support to beneficiary through existing arrangements.
The new scheme is expected to improve housing stock in the rural areas, as well as create employment opportunities in the rural housing sector.