HDFC, which is optimistic that the government’s interest subsidy scheme will boost affordable housing, has already disbursed about Rs 400 crore under the plan and sees a huge growth potential going ahead. The Credit Linked Subsidy Scheme (CLSS) to boost demand for affordable housing can be a game changer and help revive the real estate sector, which is facing a multi-year slowdown, and other related industries, HDFC MD Renu Sud Karnad said.
Under the scheme, the government provides interest subsidy up to 6.5 per cent to first time home buyer with household income up to Rs 1.5 lakh per month. “The scheme can be a game changer. I think, it could be a catalyst to bring about revival in the housing sector, which in turn will lead to very positive impact on the economic growth as almost 269 industries big and small depend on the housing sector,” Karnad told PTI.
The subsidy scheme coupled with benefits provided to developers on construction of affordable housing will create a extremely positive impact, she said. HDFC has provided loans worth Rs 400 crore to over 2,900 customers in EWS/LIG category under this scheme so far and has granted subsidy worth Rs 58 crore. Asked about the target going forward, Karnad said, “At this stage, it is difficult to quantify. But, we see a huge potential.
“At HDFC, our responsibility is to take this PMAY (Pradhan Mantri Awaas Yojana) to the real beneficiaries by educating them. In fact, we have created special teams across the country just to promote these initiatives by the government.” HDFC MD said the loans for MIG (middle income group) categories have just begun this month.
Last week, HDFC organised a seminar in the national capital witnessing participation of over 100 developers from the Delhi-NCR.
The officials from Ministry of Urban Development and Ministry of Housing and Urban Poverty Alleviation and the National Housing Bank also participated in the event. “We have also created a special film to educate our staff. We are also visiting other corporates to educate them for the benefit of their employees,” she said. Karnad said these schemes can have a domino effect across the spectrum from middle to high cost housing.
“Our average loan in TIER II and TIER III Towns is less than Rs 15 lakh though our all India Average is around Rs 25.5 lakh,” she added. Under this scheme, interest subsidy gets credited upfront to the loan account of beneficiaries through Primary Lending Institutions like HDFC resulting in reduced effective housing loan and Equated Monthly Instalment (EMI).
On the eve of new year, Prime Minister Narendra Modi had announced interest subsidy of up to 4 per cent on loans taken in the new year under the Pradhan Mantri Awaas Yojana. In urban areas housing loans of up to Rs 9 lakh and up to Rs 12 lakh will receive interest subsidy of 4 per cent and 3 per cent, respectively, while in rural areas loans up to Rs 2 lakh will get an interest subvention of 3 per cent.