Govt clears 'Housing for All' scheme

Interest relief for urban poor

Aiming to provide affordable houses to poor and rehabilitate slum dwellers, the Centre on Wednesday cleared ambitious 'Housing for All by 2022' scheme and approved substantial increase in interest relief on loans

The Union Cabinet chaired by Prime Minister Narendra Modi accepted the recommendations of an Inter-Ministerial Committee to increase interest subvention to 6.50 per cent on housing loans to beneficiaries belonging to economically weaker section (EWS) including slum- dwellers and low income groups (LIGs).

Benefits accruing to the urban poor would be in the range of Rs 2.30 lakh each and as a result, the monthly EMI would come down to Rs 2,852 per month. With the interest rate of 10.50 per cent, the current EMI on admissible loan component of Rs 6 lakh over a 15-year period works out to Rs 6,632 per month.

The Cabinet decision to credit-linked the subsidy of 6.50 per cent brings the EMI down to Rs 4,050 per month, an Urban Housing and Poverty Alleviation Ministry official said.

The central assistance would range from Rs 1 lakh to Rs 2.30 lakh per recipient under different components of the National Urban Housing Mission to build two crore new houses over the next seven years.

The plan approved by the Union cabinet provides benefits in four categories: Rs 1 lakh per beneficiary under the slum redevelopment plan with private participation, a 6.5 per cent interest subsidy under affordable housing through credit- linked scheme, Rs 1.5 lakh under affordable housing scheme with public and private sector partnerships and Rs 1.5 lakh for improving existing houses.

The credit Linked Subsidy Scheme will be implemented in all cities and towns from the current fiscal itself.

The first phase of the mission between 2015-March 2017 will cover 100 cities, while phase 2 from April 2017 to March 2019 would cover 200 cities and the remaining urban centres will be covered in phase 3 from 2019 to 2022.