In a boost to homebuyers, the government on Friday extended the interest subsidy of up to Rs 2.6 lakh on home loans under the Pradhan Mantri Awas Yojna (Urban) to the middle income group (MIG) beneficiaries by fifteen more months till March 2019. On December 31 last year, Prime Minister Narendra Modi had announced the credit-linked subsidy scheme for MIG (CLSS- MIG) till December this year. Under the scheme, an interest subsidy of 4% on housing loans of up to Rs 9 lakh for those with an income of Rs 12 lakh per year and of 3% on housing loans of up to Rs 12 lakh for those having an income of Rs 18 lakh per year is being given. According to senior government officials, the scheme, effective January 1, 2017, and available only in 2017, would benefit borrowers taking loans for buying ready-to-occupy houses.
However, given that inventory of houses in the affordable segment is relatively scarce, most borrowers availing loans for under-construction houses may end up coughing up the entire interest amount, if construction is not completed within the stipulated one-year window, the official said. Reiterating the commitment to meet the Housing for All target in urban areas by 2022, Durga Shanker Mishra, housing and urban affairs secretary, urged private investors to invest in affordable housing, being promoted by the Centre in a big way with several incentives and concessions. On Thursday, housing and urban affairs minister Hardeep Singh Puri announced two new models for private investments in low-cost housing on private lands — a central assistance of Rs 2.5 lakh per house as interest subsidy on bank loans under the CLSS and a central assistance of `1.5 lakh per house in case the beneficiary does not take bank loan.
He also said eight PPP options, including six for promoting affordable housing with private investments using government lands, have been evolved after extensive consultations with states, promoter bodies and other stakeholders. The first (DBT model) envisages private builders designing, building and transferring houses built on government land to public authorities. Government land will be allocated based on least cost of construction. Under the second model (mixed development cross-subsidised housing), government land will be allotted based on number of affordable homes to be built on the plot by builders. The third (annuity-based subsidised housing) will entail builders to invest against deferred annuity payments by the government. Land allocation to builders will be based on unit cost of construction.
The fourth model, annuity-cum-capital grant based affordable housing, is where builders can pay a share of project cost upfront. Allocation of land is based on unit cost of construction. The sixth model, direct relationship rental housing, is where recovery of cost by builders is through rental income from houses built on government land. Under these six PPP models, beneficiaries can avail central assistance of Rs 1-2.5 lakh per house as provisioned under different components of PMAY(Urban).