Pradhan Mantri Awas Yojana: Govt tweaks rule to make smaller homes affordable

Angelo Anderson
November 18, 2017

A day after the Cabinet cleared the raising of the carpet area of houses for the middle income group (MIG) category under the Pradhan Mantri Awas Yojana-Urban (PMAY-U), stocks of affordable housing firms rose up to 15 per cent in afternoon trade.

The carpet area of a housing unit is its actual usable area, enclosed within its walls.

Under the MIG-I category, the carpet area of the houses has been enhanced from 90 sq.Mtr to 120 sq.Mtr, while under the MIG-II segment, it has been increased to 150 sq.Mtr from the current 110 sq.Mtr, Union minister Ravi Shankar Prasad said while briefing them about the Union cabinet decisions.

Concurring with the argument about a wider array of choices for home buyers vice-chairman & managing director, Indiabulls Housing Finance Gagan Banga said the "fence sitters", who were delaying home purchases, will be given a push. The Government is anxious a lot as neither middle income group people nor private operators have shown interest in the PMAY (urban). The Centre has recently brought a policy involving the new Public Private Partnership (PPP) policy for affordable housing in India is drafted to minimise risks like land, financing and capital investments, maintenance and recovery of the capital invested.

"In MIG-1, an interest subsidy of 4 per cent has been provided for loan amounts up to Rs 9 lakh while in MIG-2, an interest subsidy of 3 per cent has been provided for loan amounts up to Rs 12 lakh", an official release stated.

The limit of 120 sq m. and 150 sq seen as a reasonable enhancement and would cater to the market generally scouted by the MIG belonging to the two income categories specified in the scheme.

NAREDCO's Chairman Rajeev Talwar and President Niranjan Hiranandani said this decision would help in meeting the aspiration of millions of MIG (middle income group) home buyers.

The interest subsidy has been in force since January 1, 2017 pursuant to the PM Modi's address on December 31, 2016 announcing increased benefits for poor people availing housing loans, and a new interest subsidy scheme for housing loans for the Middle Income Group (MIG).

The CLSS for MIG is now effective up to 31 March 2019.

Other reports by Iphone Fresh

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