The government’s silence on extending a subsidy scheme for the middle-income group under the Pradhan Mantri Awas Yojna beyond March 2021 has surprised potential homebuyers, experts and industry stakeholders.
In a bid to boost demand for real estate and construction activity, the government had extended the benefit of the Credit Linked Subsidy Scheme (CLSS) by a year to March end. There’s been no intimation on a further extension of the scheme, which may end up hurting Prime Minister Narendra Modi’s objective of Housing for All by 2022, apart from hitting the economy.
The government started PMAY in June 2015 with the goal of building 20 million affordable houses by March 31, 2022. The scheme initially aimed to provide home loans to customers from the economically weaker section and the low-income group and was extended to the middle-income group in January 2017.
“The schemes for the middle-income group have benefitted the middle class immensely. The government has been proactive in extending the MIG schemes earlier and I would urge them to extend it once more at least up to March 31, 2022, as it has been a big driver towards achieving the government’s goal of Housing for All by 2022, apart for helping economic growth,” Renu Sud Karnad, managing director of HDFC, told ET.
According to Karnad, the scheme has been a growth accelerator for the real estate sector, which is the second-largest employment generator, and impacts almost 300 industries directly or indirectly. Industry stakeholders said extending the CLSS benefit is crucial in the backdrop of the ongoing pandemic that is disrupting demand again. The National Real Estate Development Council (NARDECO), a self-regulatory body under the ministry of housing and urban affairs, urged the government to extend all fiscal impetus like CLSS benefit to first-time homebuyers under the scheme until March 2022.
“As owning a house has become omnipotent in this pandemic life, these benefits will play a catalytic role in sustaining the demand and be conducive to affordable home buyers,” said Niranjan Hiranandani, president of NAREDCO.
He said the extension of benefits will also persuade the industry and help the government achieve its goal of Housing for All by 2022.
Affordable and mid-income housing has emerged as the mainstay of real estate demand over the past few years, with the government’s policy initiatives including CLSS encouraging many first-time homebuyers.
Under the CLSS, middle-income homebuyers with an annual income of Rs 6-18 lakh can get a 3-4% subsidy on the interest payable on loans ranging from Rs 9 lakh to Rs 12 lakh for a house with a carpet area of 1,722-2,152 square feet, while any additional loan will be at a non-subsidised rate.
According to Grant Thornton Bharat, the PMAY scheme has had a positive impact on the Indian economy, generating employment opportunities for more than 60 million workers across several sectors. Under the scheme, over 10 million houses have been sanctioned and 4.3 million have been completed across the nation. The government, through the ministry of housing and urban affairs, has committed over $24 billion for implementation of this scheme, with a total investment of almost $100 billion.
Source :The Economic Times
