In a bid to boost rural and urban housing post demonetisation, Prime Minister Narendra Modi today announced interest subsidy of up to 4 per cent on loans taken in the new year under the Pradhan Mantri Awaas Yojana.
Announcing a slew of measures, Modi in his national address on New Year's eve also said 33 per cent more homes will be built for the poor under this scheme in rural areas.
Besides, in urban areas housing loans of up to Rs 9 lakh and up to Rs 12 lakh will receive interest subsidy of 4 per cent and 3 per cent respectively, while in rural areas loans up to Rs 2 lakh will get an interest subvention of 3 per cent.
"Even so many years after independence, millions of poor do not have their own home. When black money increased in our economy, houses became out of reach of even the middle class. The government has taken some major decisions to ensure homes for the poor, the neo middle class and the middle class," he said.
Elaborating on the steps taken to ensure homes for poor and middle class in both rural and urban areas, he said two new middle income categories have been created under the Pradhan Mantri Awaas Yojana in urban areas.
"Loans of up to Rs 9 lakh taken in 2017 will receive interest subvention of 4 per cent. Loans of up to Rs 12 lakh taken in 2017 will receive interest subvention of 3 per cent," Modi said.
The number of houses being built for the poor in rural areas under the Pradhan Mantri Awaas Yojana is being increased by 33 per cent, he added.
The Prime Minister further said: "In addition to this, another scheme is being put in place for the neo middle and middle class in rural areas. Loans of up to Rs 2 lakh taken in 2017, for new housing, or extension of housing in rural areas, will receive an interest subvention of 3 per cent.
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Commenting on the PM's announcement, Indiabullls Housing Finance VC & MD Gagan Banga said: "The Prime Minister has effectively made the EMI cheque smaller than the rent cheque for the affordable housing segment - a tremendously positive announcement coming on the back of many directed steps to realise the "Housing for All" objective."
Realty firm Omaxe CMD Rohtas Goel hailed the government's decision to provide interest subvention and said this would provide boost to affordable housing especially in tier II and III cities.
DHFL CEO harshil Mehta said: "We welcome government's decision to provide interest rate relief to home buyers who want to avail loans for building or expanding their homes in 2017. It is in line with government's vision to achieve "Housing for all by 2022" and will go a long way in addressing housing shortage which currently stands at 40 million units."
Gera Developments MD Rohit Gera said: "The inclusion of loans of 9 and 12 lakhs under the PMAY scheme will boost demand for homes under the affordable housing in urban areas thus providing much needed push to the realty sector."
"I hope the Prime Minister soon announces a slew of measures to stop the regeneration of black money and to address the issue of corruption that continues unabated," said Gera, who is also Vice President, CREDAI Metro, Pune.
