The number of urban middle-class home buyers availing Centre’s interest subsidy scheme to purchase or build their first home has more than doubled in the past eight months as compared to the 2017-18 financial year. According to estimates, the number of beneficiaries is likely to cross one lakh by March end.
PM Narendra Modi had announced interest subsidy for two categories of middle income groups in urban areas with annual income of up to Rs.18 lakh, which came into effect from January 2017. “We are expecting higher demand as more and more people submit their applications. In some cases, banks may not have taken keen interest since they don’t see greater business. As government pays the entire interest subsidy of Rs.2.3 lakh upfront, the outstanding loan amount gets reduced and hence banks also get less interest,” said a source.
But he added the situation is changing fast as more builders are focussing on building flats that are affordable for MIGs and the home buyers have also become more demanding. The Centre has so far disbursed Rs.6,300 crore to 2.75 lakh beneficiaries as direct financial assistance under four different components to help people build a home or buy a flat, housing secretary D S Mishra said.
Ministry’s data said majority of the beneficiaries, about 56%, availed the central assistance to build independent houses; 33% went for buying a flat and about 7% beneficiaries were the earlier slum dwellers who got a flat where they lived for years. Mishra said about 3.89 lakh dwelling units have already been completed for rehabilitating slum dwellers.
The ministry also said it has sanctioned 65 lakh houses under PM Awas Yojna (Urban) and 12 lakh houses have been completed in the past four years against only 18,000 completed during UPA-I and II. “We are confident of sanctioning 80 lakh out of the targeted one crore urban houses by March and complete about 25 lakh houses,” Mishra claimed.