Modi’s PMAY impact! For the first time, India's home loans touched double-digit mark as a percentage of GDP in the financial year 2018, thanks to Prime Minister Narendra Modi's flagship Pradhan Mantri Awas Yojana.
Modi’s PMAY impact! For the first time, India’s home loans touched double-digit mark as a percentage of GDP in the financial year 2018, thanks to Prime Minister Narendra Modi’s flagship Pradhan Mantri Awas Yojana, a report has shown. Housing credit grew 16% in FY18, taking the mortgage penetration (housing credit as a percentage of GDP) to a double-digit mark of 10% for the first time in FY18, up from 9.5% in FY17, an ICRA report said.
In the financial year 2018-19, the home loan growth is going to accelerate further. “Growing affordability for the first-time home buyers, supported by government incentives like the PM’s Awas Yojana are expected to result in a rise in primary home purchases, especially in the affordable housing segment, which will help segmental loan growth to 17-19%,” the ICRA report said.
The overall house loan in the year 2017-18 was 39% pushed by new mortgage players in the affordable housing segment. In fact, in the five years, the mortgage penetration level could to go up by 300-500 basis points, the report added. Under the Pradhan Mantri Awas Yojana, Narendra Modi has set the target of building 20 million affordable houses for urban poor.
Recently, to give a further push to the plan, the government increased the carpet area for houses eligible for subsidy under the Credit-Linked Subsidy Scheme (CLSS) for the middle-income group (MIG). This will particularly help those living in Tier II and Tier III cities.
As per the revised norms, MIG-I category home buyers with household income between Rs 6 lakh and Rs 12 lakh are now eligible for a subsidy for homes up to carpet area of 160 sq. m. from the earlier 120 sq. m. Similarly, MIG-II category home buyers with household income between Rs 12 lakh and Rs 18 lakh are also eligible for a subsidy for homes with a carpet area of up to 200 sq. m. from the earlier 150 sq. m.