In a big move, the FM announced the one-year extension of the Credit Linked Subsidy Scheme up to March 2021, which will help push the demand for affordable housing.
In a bid to give a boost to affordable housing, reeling under the impact of the Covid-19 pandemic and the nationwide lockdown, Finance Minister Nirmala Sitharaman today announced some measures to give relief to the common man and the housing sector.
In a big move, the FM announced the one-year extension of the Credit Linked Subsidy Scheme (CLSS) up to March 2021, which will help push the demand for affordable housing.
“Ever since its implementation in 2017, the CLSS scheme has already benefitted over 3.3 lakh families and the extension will further aid many more families to avail housing under this scheme. As a ripple effect of increased demand for affordable housing, it will positively push demand for raw materials like cement, steel, transport and other construction materials,” said Anuj Puri, Chairman, ANAROCK Property Consultants.
Talking about the benefits of this move, Adhil Shetty, CEO, BankBazaar.com, said, “Finance Minister Nirmala Sitharaman’s announcement to extend the Credit Linked Interest Subsidy Scheme deadline to March 31, 2021, under the Pradhan Mantri Awas Yojana, will encourage middle-class families in realising their home-buying dreams despite the prevailing economic challenges. Under this scheme, eligible families with annual household income between Rs 6 lakh and Rs 18 lakh per annum will now get another year to benefit from an upfront interest subsidy of up to Rs. 2.35 lakh on their approved home loans. This can also trigger a spur in the demand for affordable houses, which, in turn, will relieve the stress experienced by countless developers struggling with mounting inventories since 2019 to some extent.”
However, considering we are still deep in the Covid-19 crisis, the government should also focus on how any form of credit will be delivered to customers. Due to health risks, it’s no longer feasible for credit-seekers to visit banks and expose themselves to the flu. “Therefore, loans should now ideally be delivered in a contactless and paperless manner. The best way to do this would be through greater use of Aadhaar e-KYC, Video KYC, and CKYC,” added Shetty.
It may be noted that the Modi government’s push for affordable housing has been unmistakeable in the last six years. Its Housing for All by 2022 project has already resulted in multiple sops and incentives. As a consequence, there has been a significant increase in activity in the affordable segment over the last few years. As per ANAROCK research, there are currently 15.62 lakh under construction units across the top 7 cities, of which nearly 39% are in the affordable segment priced <INR 40 lakh.
Earlier on Wednesday, the FM had announced relaxation in project timelines under RERA to bring relief to developers as well as to safeguard the interest of homebuyers. Providing a major relief to real estate developers, the FM had extended the timeline for project completion and registration by 6 months, which is said to be a big boost for the already-stressed realty sector. For, the move will not only provide more time to complete the project without any liability for delay in completion of the project, but will also prevent developers from facing the legal cases on account of delay limited to the 6 months’ extension window.