Realty players laud carpet area revision for MIG

New Delhi: Market players in the real estate sector welcomed the increase in carpet area limit of houses eligible for the Credit Linked Subsidy Scheme (CLSS) of the Pradhan Mantri Awas Yojana for the middle income group (MIG), which they say would bring a large number of houses under the scheme.

The Ministry of Housing and Urban Affairs on Tuesday revised the carpet area of houses eligible for CLSS under the Pradhan Mantri Awas Yojana (Urban) in respect of MIG I from “up to 120 square metre” to “up to 160 square metre” and, in respect of MIG II the limit has been raised from 150 square metre to 200 square metre.

“The latest relaxation will allow a large proportion of housing, particularly in tier-1 cities, to be covered under the scheme,” said Anshuman Magazine, Chairman of India and South East Asia, CBRE.

He added: “This will not only enable more home buyers to avail the subsidies and other incentives in the scheme, but will also help bolster construction activity in the affordable housing sector in the country.”

Colliers International India’s Senior Associate Director for Research, Surabhi Arora said: “The move will make more buyers eligible for interest subsidy and will also help to reduce the inventory overhang in the housing sector.”

“However, to revive the housing sector, we need a strong demand-side push in the mid-segment, which can be done through a strong economy, thus enabling ample job opportunities and security for the buyers,” he added.

Under CLSS for MIG-I, 4 per cent interest subsidy is available on a loan up to Rs 9 lakh for people with an annual income between Rs 6-12 lakh, while 3 per cent (MIG II) interest subsidy is given on a loan up to Rs 12 lakh to people with income between Rs 12-18 lakh per annum.

Further, under the scheme a beneficiary can avail subsidy up to Rs 2.35 lakh, and it is applicable for the first-time home buyers till March 31, 2019.

The housing ministry in its statement said the decision to revise the carpet area “augurs well with the Reserve Bank of India (RBI) policy to revise the housing loan limits for Priority Sector lending eligibility”.

NCR-based developer BDI Group’s Managing Director, Sumit Berry said this step would boost the real estate sector and would enable more customers to qualify for the subsidy and avail the benefits provided under the PMAY.

According to Harshil Mehta, CEO of DHFL, along with broadening the home ownership opportunity for first time buyers the decision would also “provide the needed impetus to the supply dynamics.”

As on June 6, 2018, the government has disbursed an amount of Rs 736.79 crore to 35,204 beneficiaries belonging to the MIG category, the housing ministry’s statement said.

Rakesh Reddy, Director of Aparna Constructions was of the opinion that the push for affordable housing “has now reached its desired potential with the recent announcement”.

The decision along with RBI’s revision of loan limit would generate positive momentum and surely work in favour of the industry players and in the best interest of the home buyers, he added.