New Interest Subsidy Scheme a Step Forward to Achieve Housing for All by 2022
May 22, 2017 Home Loan
PM Narendra Modi’s ambitious project to provide housing for all by the year 2022 has got a big boost with the apparent upgradation of the interest based subsidy scheme for home loans. It is expected that the central government’s decision to provide interest subsidy under the Pradhan Mantri Awas Yojana (PMAY) will push the sales of houses in the lower as well as middle income groups.
One of the major obstacles to achieving ‘Housing for all’ has been the poor state of rural infrastructure- both social and economical. While there are thousands of villages across the country still lacking basic infrastructure, the financial capabilities of people for purchasing the property has been largely underwhelming too. Since the majority of the Indian population lives in rural areas, it was of utmost importance to lift the infra in remote areas so that each citizen lives in his own house by 2022.
In his new year's speech, PM Modi announced a horde of measures in order to promote housing in urban as well as rural areas of the country. PM indicated that the government plans to construct 33 percent of homes for the poor in rural areas. Moreover, with the implementation of interest subsidy scheme on home loans, acquiring loans from banks will certainly become easily for those working in the unorganised sector. Experts expect such measures will certainly boost rural housing among poor as well as middle class.
New Interest Subsidy Scheme at a Glance
The soon to be implemented interest based subsidy scheme for home loan aims to help people in lower to middle income groups to buy homes. Under the said scheme, people earning up to 12 lakh rupees annually will be eligible to get a 4 percent rebate in interest against home loans up to 9 lakh rupees. People having an annual income between 12 to 18 lakh rupees will be benefited with a 3 percent rebate in interest against home loan borrowed. Moreover, the government is planning to release the entire subsidy amount in advance so as to help home loan borrowers make the initial payment and a Rs. 1000 crore fund is already kept aside by the government for interest subsidy payments.
In order to boost rural housing, the centre plans to provide 3 percent interest subsidy on home loans up to Rs 2 lakh.
The interest subsidy scheme is applicable only if one purchases a home under the PMAY. Moreover, only first time home buyers will be eligible for a subsidy while those already having a house of their own anywhere in the country will not be benefited under the interest subsidy scheme.
With all its benefits, the new interest based subsidy scheme is surely a step forward in achieving the target of housing for all by 2022.
One of the major obstacles to achieving ‘Housing for all’ has been the poor state of rural infrastructure- both social and economical. While there are thousands of villages across the country still lacking basic infrastructure, the financial capabilities of people for purchasing the property has been largely underwhelming too. Since the majority of the Indian population lives in rural areas, it was of utmost importance to lift the infra in remote areas so that each citizen lives in his own house by 2022.
In his new year's speech, PM Modi announced a horde of measures in order to promote housing in urban as well as rural areas of the country. PM indicated that the government plans to construct 33 percent of homes for the poor in rural areas. Moreover, with the implementation of interest subsidy scheme on home loans, acquiring loans from banks will certainly become easily for those working in the unorganised sector. Experts expect such measures will certainly boost rural housing among poor as well as middle class.
New Interest Subsidy Scheme at a Glance
The soon to be implemented interest based subsidy scheme for home loan aims to help people in lower to middle income groups to buy homes. Under the said scheme, people earning up to 12 lakh rupees annually will be eligible to get a 4 percent rebate in interest against home loans up to 9 lakh rupees. People having an annual income between 12 to 18 lakh rupees will be benefited with a 3 percent rebate in interest against home loan borrowed. Moreover, the government is planning to release the entire subsidy amount in advance so as to help home loan borrowers make the initial payment and a Rs. 1000 crore fund is already kept aside by the government for interest subsidy payments.
In order to boost rural housing, the centre plans to provide 3 percent interest subsidy on home loans up to Rs 2 lakh.
The interest subsidy scheme is applicable only if one purchases a home under the PMAY. Moreover, only first time home buyers will be eligible for a subsidy while those already having a house of their own anywhere in the country will not be benefited under the interest subsidy scheme.
With all its benefits, the new interest based subsidy scheme is surely a step forward in achieving the target of housing for all by 2022.
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