Govt’s housing gift for middle class comes with an expiry date

NEWDELHI: The middle class found a place in the Pradhan Mantri Awas Yojana (PMAY), the government’s flagship housing programme for the poor, after PM Narendra Modi announced an interest waiver scheme on housing loan up to ₹12 lakh.

However, there is a caveat. As per the proposal being finalised by the Union housing and urban poverty alleviation ministry, those in the “middle income” category will be able to avail the subsidy only for a year.

Sources said the one-year time frame was necessitated by the fact that the finance ministry has indicated an allocation of only ₹1,000 crore under the programme.

“We have decided to launch the scheme on an experimental basis for a year. Based on feedback, the government will take a call on whether the scheme should be extended,” said a ministry official.

The ministry intends to cover 50,000 people under the scheme in 2017-18.

Modi had on December 31 announced two new components of credit-linked subsidy under the existing “Housing for All” programme. According to the scheme, those with an annual income of up to ₹12 lakh can avail a 3% interest subsidy on a loan of ₹9 lakh, while those with an income up to ₹18 lakh will get subsidy of 4% on a loan of ₹12 lakh.

“This will mean assistance in the range of ₹1.98 lakh to ₹2.30 lakh per beneficiary,” said an official.

Only those who do not own a pucca house will be eligible. Besides, the two category of subsidy can be availed for building a house measuring 968 sq ft and 1184 sq ft respectively.

So far, the PMAY did not cover the middle class.