The Finance Ministry on Tuesday has given a greenlight to Rs 60,000 crore incentive program aimed at bolstering urban housing initiatives. According to the ET Now exclusive report, the Expenditure Finance Committee, a key arm of the Finance Ministry, has provided its seal of approval to the Housing Ministry’s proposal, signaling a significant stride in promoting affordable housing in urban areas.
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The ET Now report added that the Housing Ministry’s proposal, which primarily focuses on extending interest subsidies to support the urban poor, has been forwarded to the Cabinet for further evaluation and is anticipated to receive the Cabinet’s nod in the near future. Once approved, this initiative will pave the way for the launch of a new home loan scheme designed to offer substantial benefits to the urban poor and the middle-income demographic.
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Under the proposed scheme, eligible individuals can expect to receive an interest subvention ranging from 3 per cent to 6 per cent on their home loans. This interest subsidy will be applicable to home loans of up to Rs 50 lakh, widening the scope of assistance beyond the existing Credit-Linked Subsidy Scheme (CLSS). As per the ET Now report, the new scheme promises to provide greater flexibility in terms of the size and area of flats or houses, offering a more extensive array of housing options to beneficiaries.
The CLSS scheme, an integral component of the Prime Minister Awas Yojana, primarily targets economically weaker sections of the population, demonstrating the government’s continued commitment to addressing housing needs across various income segments.
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To enhance access to institutional credit for urban housing needs among the economically disadvantaged, the Mission will employ a credit-linked subsidy component as a demand-side initiative. To facilitate the efficient distribution of this subsidy to lending institutions and to oversee its implementation, the National Housing Bank, Housing and Urban Development Corporation, and the State Bank of India have been designated as Central Nodal Agencies. Under this Mission, beneficiaries are eligible to avail benefits from only one specific component.
