PM Awas Yojna: Cabinet increases carpet area of houses eligible for interest subsidy

NEW DELHI: The Union Cabinet on Thursday approved the increase in the carpet area of houses eligible for interest subsidy under the credit linked subsidy scheme for the middle income group under Pradhan Mantri Awas Yojana.

Under the MIG-I category, the carpet area of the houses has been enhanced from 90 sq.Mtr to 120 sq.Mtr, while under the MIG-II segment, it has been increased to 150 sq.Mtr from the current 110 sq.Mtr, Union minister Ravi Shankar Prasad told reporters while briefing them about the Union cabinet decisions.

To further enhance the scope, coverage and outreach of the scheme, the Cabinet has approved the following:

-Increasing the carpet area in the MIG I category of CLSS from the existing 90 square metre to "up to 120 square metre" and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square metre to "up to 150 square metre"; and

-Making the above change effective from January this year i.e. the date the CLSS for MIG had become effective.

 The CLSS for MIG is a pro-active step in meeting the challenges of urban housing shortage. It also is a pioneering step to enable the middle income group to access the benefits of an interest subsidy scheme.

The CLSS for MIG covers two income segments in the MIG viz. Rs 6,00,001 to Rs 12,00,000 (MIG-I) and Rs 12,00,001 to Rs 18,00,000 (MIG-II) per annum.

In the MIG-1, an interest subsidy of 4% has been provided for loan amounts up to Rs 9 lakh while in MIG-2, an interest subsidy of 3% has been provided for loan amount of Rs 12 lakh. The interest subsidy will be calculated at 9% NPV over a maximum loan tenure of 20 years or the actual tenure, whichever is lesser. Housing loans above 9 lakh and 12 lakh will be at non-subsidized rates.

The CLSS for MIG is currently effective up to 31st March 2019.

Impact

-The limit of 120 sq m. and 150 sq m. is seen as a reasonable enhancement and would cater to the market generally scouted by the MIG belonging to the two income categories specified in the scheme.

-The increase in carpet area will enable the Ml category of individuals to have a wider choice in developers' projects.

-The increased carpet area will also give a boost to the sale of ready built flats in the affordable housing segment.