PMAY houses get a boost: 33% carpet area increased for subsidy

In a major decision to boost Affordable housing, it has been decided to revise the carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for the Middle-Income Group (MIG) under Pradhan Mantri Awas Yojana (Urban) in respect of MIG I from “up to 120 square metre” to be increased to “up to 160 square metre” and, in respect of MIG II from “up to 150 square metre” to “up to 200 square metre”.
CLSS – MIG Scheme Details post this Revision:
*Subsidy will be restricted to this loan amount and Loan quantum beyond this limit will be at non-subsidised rates.
**with effect from 01.01.2017 i.e from the date when the scheme became operational.
BENEFITS
The decision is another big step to boost the construction sector that contributes to increased activity on the supply side. This initiative is expected to result in enhanced economic activity that would contribute to improvement in the demand side.
These enhancements will now enable more MIG customers to qualify for the subsidy and avail the benefits provided under the ambitious flagship Mission of Pradhan Mantri Awas Yojana (Urban).
Apart from increasing the number of beneficiaries, the increase in carpet area will improve the construction activity and will assist in moving the housing sector forward.
This also augurs well with the Reserve Bank of India policy to revise the housing loan limits for Priority Sector lending (PSL) eligibility where it has been decided to revise the housing loan limits for PSL eligibility from existing ₹28 lakh to ₹35 lakh in metropolitan centres (with population of ten lakh and above), and from existing ₹20 lakh to ₹25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed ₹45 lakh and ₹30 lakh, respectively.
The increased construction activity in the housing sector has a cascading effect on core sectors like cement, steel, machinery and other allied sectors. More construction activity in the urban areas would result in the creation of more jobs for both skilled and unskilled workers.
Overall this will be a big boost to the economy.