NAREDCO welcomes the announcements by Prime Minister

New Delhi, 3^rd January 2017: “NAREDCO welcomes the Government’s move to create two additional categories under Pradhan Mantri Awaas Yojana (PMAY-Urban) for interest subvention. Under this, home loans up to Rs. 9 Lacs taken in 2017, will receive interest subvention of 4 per cent and home loans up to Rs. 12 Lacs taken in 2017 will receive interest subvention of 3 percent. This will be over and above the 6.5 percent interest subvention on home loans upto Rs. 6 Lacs already available in PMAY. Increase by 33 percent in construction of houses under the Pradhan Mantri Awas Yojana for the economically section is also welcomed.

Announcement of another new scheme for neo middle class in rural areas which provides an interest subvention of 3 percent on loans up to Rs. 2 Lac taken in 2017, for construction of new houses, or extension of old houses is also welcomed.

Government of India launched Pradhan Mantri Awaas Yojna (PMAY) to build 2 crore urban and 4 crore rural houses by 2022, across India. As per estimates, more than 95 percent of urban housing shortage is in the affordable housing segment which comprises Lower Income Group (LIG) and Economically Weaker Section (EWS). In first phase 100 cities and in second phase another 200 cities will be covered and completed by March 2017 and March 2019, respectively. Third and final phase will cover the remaining cities in the country. NAREDCO, taking unprecedented urbanization in to consideration, feels that private sector should be roped in to meet the challenges ahead and they should be given some freedom to construct and market, under the broad policy of the Government.

Rural housing construction under PMAY has got momentum but urban housing is still struggling because of complexities of land acquisition, lack of infrastructure and non-availability and affordability of housing finance from recognised banking channel. Government announcement of interest subvention on home loans upto Rs. 12 Lacs will be of great relief to LIG and neo middle class, said Mr. Parveen Jain, President, NAREDCO. He felt that private sector developers, with some flexibility in planning, execution and marketing alongwith some incentives in taxation would be of great help in meeting the housing shortage in urban areas.

These announcements by Prime Minister Shri Narendra Modi on eve of New Year, is seen as a positive step to accomplish the vision of Housing for All by 2022 as more and more people in low and middle income groups would be able to take home loans upto Rs. 12 Lacs and buy their dream houses. To make people in unorganized sector to utilize this facility, it would be necessary to create an environment in which loans are easily available to these people from the banks and they do not get trapped into procedural hassles. NAREDCO hopes that these aspects would be taken care of by the banks.