Interest subsidy on home loan to help achieve Housing For All

New Delhi: Realtors’ body NAREDCO today hailed the government’s decision to provide interest subsidy under the Pradhan Mantri Awaas Yojana, saying the move will help in accomplishing the vision of ‘Housing for All’ by 2022.

However, the association said that loans from banks should be available easily for people in the unorganised sector.

To boost rural and urban housing post demonetisation, Prime Minister Narendra Modi 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.

“NAREDCO welcomes the government’s move to create two additional categories under Pradhan Mantri Awaas Yojana (PMAY-Urban) for interest subvention,” its President Parveen Jain said in a statement.

Under this, home loans up to Rs 9 lakh taken in 2017, will receive interest subvention of 4 per cent and home loans up to Rs 12 lakh will receive interest subvention of 3 per cent.

The announcement of another new scheme for neo middle class in rural areas which provides an interest subvention of 3 per cent on loans up to Rs 2 lakh taken in 2017, for construction of new houses, or extension of old houses is also welcomed, NAREDCO said.

“Rural housing construction under PMAY has got momentum but urban housing is still struggling because of complexities of land acquisition, lack of infrastructure and non-availability and affordability of housing finance from recognised banking channel. Government announcement of interest subvention on home loans up to Rs 12 Lacs will be of great relief to LIG and neo middle class,” Jain said.

He said the private sector developers, with some flexibility in planning, execution and marketing along with some incentives in taxation, would be of great help in meeting the housing shortage in urban areas.

These announcements by the Prime Minister is seen as a positive step to accomplish the vision of Housing for All by 2022 as more and more people in low and middle income groups would be able to take home loans up to Rs 12 lakh and buy their dream houses, NAREDCO said.

“To make people in unorganised sector utilise this facility, it would be necessary to create an environment in which loans are easily available to these people from the banks and they do not get trapped into procedural hassles,” the association said.