The central government plans to increase the subsidy (capital assistance) from the current Rs. 50,000 to Rs. 80,000 per dwelling house. This subsidy will be given to developers building affordable housing meant for EWSs (economically weaker sections)
The cost ceiling is also proposed to be raised substantially.
Raise Loan Ceiling..!
According to a senior central government official “The cost of construction has gone up. With Rs. 1 lakh, one can no longer build a dwelling house on 25 square meters ( About 270 Square feet) meant for EWS's. That is why the thinking is to raise the loan ceiling for subsidy to Rs. 5 lakh from Rs 1 lakh for such dwelling houses.”
The government is also mulling a change in the interest subsidy payout. “The thinking is to give the subsidy as annuity over a period of ten years,” said an official close to the developments.
Annuity payout is akin to EMIs (Equated monthly instalments). This will reduce the overall burden of subsidy payout.
Now , the ISHUP (Interest Subsidy Scheme for Housing the Urban Poor) provides housing loan with Central Government subsidy to EWS/LIG (low Income group) persons for acquisition and construction of houses.
The subsidy is 5% per annum on interest charged on the admissible loan up to Rs. 1 lakh, for construction or acquisition of a new house.
Similarly, the existing provision under Affordable Housing in Partnership Scheme says the Central assistance under the scheme will be limited to Rs. 50,000 per rental / dwelling house for all houses meant for EWS, LIG and MIG (middle income group).
A Parliamentary committee has also suggested revising the schemes.
Developers Also..!
The revision aims at encouraging not just the end user, But also the developers to go for more and more affordable housing projects, which will reduce the housing shortage in urban areas. The Ministry of Housing and Urban Poverty Alleviation (HUPA) is the nodal ministry for both the schemes.
Src: Business Line
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