Mid-in­come Group un­der PMAY um­brella

The re­cent ini­tia­tives of Cen­tre Gov­ern­ment of in­creas­ing the car­pet area for Mid-in­come Group seg­ment and in­crease in the hous­ing loan lim­its will give due fil­lip to the real es­tate sec­tor.

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Hous­ing for all is not just a coined term for the cen­tre but the gov­ern­ment is tak­ing sev­eral ini­tia­tives for turn­ing it into a re­al­ity, in a bid to in­crease the de­mand for af­ford­able hous­ing. The state schemes along with Cen­tre’s PMAY (Prad­han Mantri Awas Yo­jna) are cre­at­ing in­cen­tives, which are let­ting the de­vel­op­ers to launch more projects in the af­ford­able hous­ing sec­tor. The move along with the gov­ern­ment de­ci­sion agreed to use the sur­plus land of sick Pub­lic Sec­tor Un­der­tak­ings (PSUS) for the con­struc­tion of af­ford­able units will ex­pand the field of af­ford­able hous­ing across the coun­try. The only re­sult to this move, is the in­creased avail­abil­ity of hous­ing sec­tor in the pri­mary as well as re­sale mar­kets. Home­buy­ers and the realty mar­kets are real ben­e­fi­cia­ries as a large num­ber of home­buy­ers will now be able to avail ben­e­fits un­der PMAYU trig­ger­ing sales.

Car­pet area in­crease

The Min­istry of Hous­ing and Ur­ban Af­fairs an­nounced an al­most 33 per cent re­lax­ation for car­pet area. The eli­gi­bil­ity limit for car­pet area had been aug­mented from 120 sq.m to 160 sq.m for MIG-I cat­e­gory, and from 150 sq.m to 200 sq.m for MIG-II cat­e­gory. The CLSS al­lows ben­e­fi­cia­ries to claim in­ter­est sub­sidy up to Rs 2.35 lakh on pur­chas­ing a house in th­ese cat­e­gories.

ex­tended in­ter­est sub­sidy

An­other ef­fec­tive move taken by the RBI, was the an­nounce­ment of the re­vi­sion of hous­ing loan lim­its for eli­gi­bil­ity for pri­or­ity sec­tor lend­ing (PSL) from the ex­ist­ing Rs 28 lakh to Rs 35 lakh for met­ros and for other cities from the cur­rent Rs 20 lakh to Rs 25 lakh. The over­all cost of the dwelling unit in the metropoli­tan cen­tre (with a

pop­u­la­tion of 10 lakh and above) and at other cen­tres should not ex­ceed Rs 45 lakh and Rs 30 lakh, re­spec­tively.


• EWS – Loans sanc­tioned on or af­ter 17/06/2015

• LIG – Loans sanc­tioned on or af­ter 01/01/2017

• MIG I – Loans sanc­tioned on or af­ter 01/01/2017

• MIG II – Loans sanc­tioned on or af­ter 01/01/2017


• You can only ap­ply for loan if you don’t own a pucca house any­where al­ready

• Com­bined in­come of those ap­ply­ing should not be more than Rs.18 Lakhs a year

• A house­hold (fam­ily) with com­bined in­come less than 18 Lakhs a year

• A sin­gle work­ing in­di­vid­ual (man/ woman/trans­gen­der) with in­come less than Rs.18 Lakhs a year

• Mar­ried cou­ple with com­bined in­come less than Rs.18 Lakhs a year

• Mar­ried cou­ple with com­bined in­come less than Rs.18 Lakhs and liv­ing with par­ents, where par­ents own the house.

how to ap­ply

For CLSS (MIG) it is not manda­tory to have a fe­male co - ap­pli­cant or owner. If your house­hold in­come is above Rs.50,000 per month, you have to ap­ply for this scheme only through your bank. If you want to find out more, ex­ten­sive de­tails of the scheme are avail­able on Prad­han Mantri Awas Yo­jana on­line web­site.

in­ter­est sub­sidy flow

Many lead­ing banks and hous­ing fi­nance com­pa­nies have em­pan­elled with NHB and HUDCO to of­fer ben­e­fits un­der PMAY. For ex­am­ple, State Bank of In­dia (SBI) and its Sub­sidiaries, ICICI bank, Axis Bank, Yes Bank, IDBI Bank and Pun­jab Na­tional Bank to name a few. Also, one is not al­lowed to switch the home loan at any time dur­ing the loan pe­riod.

Pe­riod of sub­sidy

• EWS – 20 Years or loan ten­ure

• LIG – 20 Years or loan ten­ure

• MIG I – 20 Years or loan ten­ure

• MIG II – 20 Years or loan ten­ure

Max­i­mum sub­sidy amount

• EWS – Rs. 2.67 Lakhs

• LIG – Rs. 2.2 Lakhs

• MIG I – Rs. 2.35 Lakhs

• MIG II – Rs. 2.3 Lakhs

the Pos­i­tive im­pact

Hous­ing cost varies from cities to cities and the cost of av­er­age res­i­den­tial unit in Met­ros and Tier-i cities is quite high whereas, in small cities, an el­i­gi­ble home buyer can get a big­ger car­pet area for his house. Home Buy­ers in Tier II and Tier III cities shall be the ma­jor ben­e­fi­cia­ries.” No doubt, the re­vi­sions in PMAY favourable for mid­dle in­come seg­ment will not only en­able more home­buy­ers to avail the sub­si­dies and other in­cen­tives in the scheme, but will also help bol­ster con­struc­tion ac­tiv­ity in the af­ford­able hous­ing sec­tor in the coun­try. Shar­ing a per­spec­tive on how this move will fur­ther in­crease the de­mand for af­ford­able projects in tier II and III cities. The Re­serve Bank of In­dia (RBI) has in­creased the loan lim­its for banks and hous­ing fi­nance com­pa­nies (HFC) so that th­ese fi­nan­cial in­sti­tu­tions can meet their pri­or­ity sec­tor lend­ing (PSL) re­quire­ments. The en­hance­ment in hous­ing loan lim­its would lead to first-time home buy­ers fall into the realm of af­ford­abil­ity. It would also lead to many more de­vel­op­ers look­ing at ca­ter­ing to this seg­ment. This al­to­gether will in­crease for­mal­iza­tion of the over­all econ­omy. This move has not just given re­lief to MIG seg­ment home­buy­ers but due to this re­form, real es­tate de­vel­op­ers have also kick started with their hous­ing ac­tiv­i­ties, which has given rip­pling im­pact and much needed im­pe­tus to the en­tire real es­tate mar­ket hav­ing for­ward and back­ward link­ages; thereby pro­vid­ing a push to the eco­nomic ac­tiv­i­ties in the coun­try.

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