Subsidy extension to spur affordable housing demand

The government’s move to extend an interest subsidy scheme by one year would boost the sale of affordable housing properties, said experts. The Credit-linked Subsidy Scheme (CLSS) for mid-income group — those earning between ~6 lakh and ~18 lakh — was started in May 2017, and was to end on March 31, 2020.

Extending the scheme till March 2021, Finance

Minister Nirmala

Sitharaman on Thursday said 250,000 middleincome families would benefit during 2020-2021.

This will “lead to an investment of over

~70,000 crore in housing,” the minister said.

Borrowers in MIG I (middle-income group) category with income from ~6 lakh to ~12 lakh get an interest subsidy of

4 per cent, and the MIG II category with income slab of ~12- 18 lakh gets interest subvention of 3 per cent.

“The extension of

CLSS for another year will help demand (for affordable housing) inch back as and when the economy starts to revive. This, in turn, will help the construction sector to restart operations at the earliest,” said Shishir Baijal, chairman and managing director, Knight Frank India, a property consultant. Baijal, however, said that for housing demand to return, irrespective of the category, the economy must start growing at a stable rate providing individuals financial security.

“The extension of CLSS under PMAY (Prime Minister Awas Yojana) will definitely help sustain the demand for affordable housing,” said Kamal Khetan, chairman and MD of Mumbai based Sunteck Realty.

Ashish R Puravankara, managing director at Bengaluru-based Puravankara, said the move will hopefully push the fence-sitters towards making their first home buying decision.