Centre extends interest subsidy on MIG home loans till March 2019

The central government today announced that the benefit of interest subsidy of about Rs2.60 lakh on home loans under Pradhan Mantri Awas Yojana (Urban) will now be available for beneficiaries belonging to Middle Income Groups (MIG) fir 15 more months beyond December this year.

Durga Shanker Mishra, secretary (housing and urban affairs), announced this while addressing the 'Real Estate and Infrastructure Investors Summit' organised by NAREDCO, in Mumbai today. He said the government has decided to give more time for MIG beneficiaries to avail interest subsidy under PMAY (Urban).

Prime Minister Narendra Modi, in his announcement on the 31 December last year had 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 Rs6 lakh and up to Rs12 lakh would get an interest subsidy of 4 per cent on a 20 year loan component of Rs9 lakh. Those with annual exceeding Rs12 lakh and up to Rs18 lakh would get interest subsidy of 3 per cent.

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

Mishra later held an hour-long discussion 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 and urban affairs 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.