The government of India undertook the major decision to boost housing as well as construction sectors by means of the Pradhan Mantri Awas Yojana. In this regard, there were several allotments made by the government to determine the eligibility of applicants needing the loan. Allotments had also been made over carpet area that the house must adhere to in order to be eligible for subsidy. This scheme on part of the government initially focused on the home buyer but now attention has also been devoted to providing the developers a certain degree of incentive. This has been done for them to work on bigger properties. In doing so, the government has increased the carpet area that houses must be built within to avail interest subsidy.
How carpet area can affect your PMAY subsidy?
- Why this decision came into being?
- Other Factors at Play
- Impact on other Sectors
- What are the revised norms?
Pradhan Mantri Awas Yojana: All You Need To Know:
- Eligibility Criteria For The Yojana
- Subsidies Offered Under The Scheme
- Documents Required To Avail The Subsidy
What are the revised norms?
In keeping with the revised conditions of the PMAY, the Ministry of Housing and Urban Affairs has increased the carpet area of properties eligible for subsidy under CLSS. In case of MIG, the increase has been from the previous 120 square meter to 160 square meter. In case of MIG-1, the change has been from the previous 150 square meter to 200 square meter in case of MIG-2.
Why this decision came into being
When learning everything about PMAY, it is important to understand why the decision for enhancement was undertaken. It was for the purpose of improving upon the existing exclusions of the PMAY mission that barred admittance of an entire section belonging to MIG and LIG. Such an initiative has been taken up with an intention to enhance the economic activity that can majorly contribute to improvement on the overall demand side. These modifications will allow more MIG customers to be eligible for subsidy and get their hands on the benefits extended. The mission taken on by the PMAY will also improve construction activity.
Other factors at play
You must be aware that under the new norms developed by the government, individuals having an annual income ranging between Rs. 6 Lakhs to Rs. 12 Lakhs would qualify for subsidy interest. This will be based on scheme of MIG-1 while under scheme MIG-2 individuals with an annual income of Rs. 12 Lakh to Rs. 18 Lakh will be eligible. The interest subsidy for MIG-1 and MIG-2 will remain fixed at 4% and 3% respectively. An increase in the loan amount will not affect this condition. The tenure for repayment of such loans will remain within twenty years of borrowing.
How it benefits other spheres
The increase in carpet area of houses falling under the Pradhan Mantri Awas Yojana will also go down with the Reserve Bank of India. This is because of its recent decision to make changes to housing loan limits. These changes are applicable for properties appertaining to Priority Sector Lending from an existing Rs. 28 Lakh to Rs. 35 Lakh in metro cities across the country. The increase has also been from the existing Rs. 20 Lakh to Rs. 25 Lakh in all other centers. This has been done keeping in mind the overall expenditure of dwelling units in metro cities.
Impact on other sectors
With the revision of norms and the resultant increase in construction activity, positive impact has been observed across other core sectors such as steel, machinery, cement and other allied sectors. Additionally, it must also be understood that increased construction activity inside urban areas are directly proportional to increased employment opportunities for skilled and unskilled laborers in the country. The scope of CLSS has been expanded keeping in mind the approval of the Cabinet. This scheme has taken off in the right direction with the changes made to existing norms as a result of greater inclusion and as of now almost forty thousand beneficiaries have moved forward in realizing their dream of owning their own home.
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