The PMAY CLSS was launched with the objective of 'Housing for All' wherein eligible borrower one is able to get a home loan from banks at a subsided interest rate.
PMAY Scheme Extension: With the country under lockdown as a measure to curtail the contagion of Coronavirus, the Modi government may consider extending the last date of the Pradhan Mantri Awas Yojana (PMAY) Credit-Linked Subsidy Scheme (CLSS) especially for the MIG-I and MIG-II categories. The last date for anyone wishing to avail the PMAY CLSS scheme is March 31, 2020. The other category of LIG/EWS, however, has its last date of March 31, 2022.
“Credit Link Subsidy (CLSS) for MIG 1 and 2 is applicable till March 2020 while that of EWS/LIG is till March 2022. At this crucial juncture, an extension of CLSS under PMAY for MIG 1 and 2 till March 2022 is equally desirable to achieve the intended objective,” says Deo Shankar Tripathi, MD and CEO of Aadhar Housing Finance.
The PMAY CLSS was launched with the objective of ‘Housing for All’ wherein eligible borrower is able to get a home loan from banks and housing finance companies at a subsided interest rate. “The pace of implementation of the scheme was considerably slowed down after September 18, due to liquidity crises with many HFCs focused on lending to EWS/LIG and overall fall in demand probably triggered by a slowdown in the economy,” informs Tripathi.
Going by the current situation in the country because of Covid-19, the real estate sector is one of the several sectors which will be impacted. “After a series of Government interventions, there have been visible signs of revival. The unforeseen outbreak of Corona Virus, the subsequent lockdown of 21 days and uncertainty, thereafter, has paralysed all economic activities with enormous impact on informal business, MSME and construction sector,” adds Tripathi.
The CLSS subsidy under MIG-I, MIG-II and LIG/EWS is dependant on one’s income. For borrowers falling under these categories, the percentage of subsidy and the amount of subsidy will therefore differ.
Those with income between Rs 6 lakh and Rs 12 lakh fall under MIG-I and get an interest subsidy of 4 per cent on a loan amount up to Rs.9 lakh. Similarly, those with income between Rs 12 lakh and Rs 18 lakh fall under MIG-II and get an interest subsidy of 3 per cent on a loan amount up to Rs.9 lakh. For the LIG/EWS category, the loan amount is up to Rs 6 lakh and the interest subsidy is 6.5 per cent.
Effectively, the PMAY CLSS subsidy amount comes to Rs 2,35,068 and Rs 2,30,156 for the MIG-I and MIG-II scheme respectively.
While all segments including middle income and the lower-income group will get impacted, the government also may be required to take other measures towards its objective of housing for all. “It is suggested to consider the release of at least 50 per cent of applicable subsidy to eligible beneficiaries as part of their own contribution and remaining as per present guidelines of linking with loan disbursement. This will revive housing activities fast to achieve Housing For All,” says Tripathi.