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Govt's housing gift for middle class comes with an expiry date of one year

The middle class found a place in the Pradhan Mantri Awas Yojana (PMAY), the government’s flagship housing programme for the poor, after PM Narendra Modi announced an interest waiver scheme on housing loan up to Rs 12 lakh.

However, there is a caveat. As per the proposal being finalised by the Union housing and urban poverty alleviation ministry, those in the “middle income” category will be able to avail the subsidy only for a year.

Sources said the one-year time frame was necessitated by the fact that the finance ministry has indicated an allocation of only Rs 1,000 crore under the programme.

“We have decided to launch the scheme on an experimental basis for a year. Based on feedback, the government will take a call on whether the scheme should be extended,” said a ministry official.

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The ministry intends to cover 50,000 people under the scheme in 2017-18.

Modi had on December 31 announced two new components of credit-linked subsidy under the existing “Housing for All” programme. According to the scheme, those with an annual income of up to Rs 12 lakh can avail a 3% interest subsidy on a loan of Rs 9 lakh, while those with an income up to Rs18 lakh will get subsidy of 4% on a loan of Rs 12 lakh.

“This will mean assistance in the range of Rs 1.98 lakh to Rs 2.30 lakh per beneficiary,” said an official.

Only those who do not own a pucca house will be eligible. Besides, the two category of subsidy can be availed for building a house measuring 968 sq ft and 1184 sq ft respectively.

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So far, the PMAY did not cover the middle class.

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Govt's housing gift for middle class comes with an expiry date of one year