According to a senior official in the ministry of housing and poverty alleviation, said, "These projects will, however, be permitted to have high end apartments or commercial spaces in the remaining area. Apartments or flats under 85 square metre,(About 900 square feet) of covered area are classified as MIG."
Finance Minister Mr. Pranab Mukherjee had announced in the Budget (2012-13) that ECB (external commercial borrowing) will be permitted for low cost housing but he had not defined the projects that will be eligible for it.
Eligibility Norms of Projects for ECB..!
Indian real estate companies were allowed to raise funds through ECB in 2009 only for integrated townships. Other projects can not access overseas funds through this route.
The ministry of housing is working with the department of financial services in the finance ministry to finalise eligibility norms of projects for ECB.
The move is expected to spur investments in low cost housing projects as overseas funds could be raised at lower rates. High cost of funds are often blamed for making low-cost housing a non-starter in India
Affordable Housing..!
The housing ministry is also working on defining ‘Affordable Housing’ and is formulating guidelines on how to optimise the use of plot of land for this segment.
Along with cheaper funding, this segment requires cheaper land. Ministry of housing and poverty alleviation are studying how plot of land can be made available to them.
To boost the real estate supply side, the housing ministry’s committee on affordable housing is studying what other financial support can be given to developers. This could include stamp duty exemption, lower development fees, capital subsidy on the housing stock, income tax rebate or even land concessions.
Government Assistance...!
Now, a developer constructing low cost houses can seek . Rs. 15,000 per unit (House) of government assistance.
To mobilise demand for smaller homes in the EWS (economically weaker section) and LIG (low income group) category, the ministry has suggested a credit facility to buyers with much higher interest subsidy than is available today.
The current scheme offers buyers an interest rate subsidy of 5% for loans under Rs. 1 lakh but since there are no houses that are on offer at such low prices, there have been no takers for this scheme either.
Src: ET
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