Lok Sabha Question No. 2963 (UNSTARRED), answered on 2018-03-13
Subject: Housing Loan under PMAY
Ministry: HOUSING AND URBAN AFFAIRS
Asked by: K. GOPAL

## GOVERNMENT OF INDIA

## MINISTRY OF HOUSING AND URBAN AFFAIRS

## LOK  SABHA

## UNSTARRED QUESTION NO. 2963 TO BE ANSWERED ON MARCH 13, 2018

## HOUSING LOAN UNDER PMAY

No. 2963.

DR. K. GOPAL:

SHRI TAMRADHWAJ SAHU:

Will  the  Minister  of  HOUSING  AND  URBAN AFFAIRS  be  pleased  to state:

- (a) whether it is a fact that nearly 87,000 Housing Loans have been
- sanctioned in the last 8 months under the Pradhan Mantri Awas Yojana (PMAY) and over 40,000 applications are under consideration for approval;
- (b) if so, the details thereof;
- (c) whether the target is to cater to the demand of housing shortage
- of nearly 1.2 crore and make housing available to all by 2022;
- (d) the details of the existing structure of interest subsidy scheme on home loans in the country;
- (e) the funds allocated and the amount of interest recovered under
- the interest subsidy scheme during the last three years;
- (f) whether the cooperative banks play an important role in granting home  loans,  if  so,  the  details  thereof  and  the  share  of  the
- cooperative banks in the housing industry; and
- (g) the steps taken by the Government to make the rates of interest
- on home loans affordable?

Contd…2..

## ANSWER

## THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF HOUSING AND URBAN AFFAIRS (SHRI HARDEEP SINGH PURI)

- (a) & (b): Under  the  Credit  Linked  Subsidy  Scheme  (CLSS  for EWS/LIG & CLSS for MIG) component of the Pradhan Mantri Awas Yojana  (Urban)  {PMAY[U]},  a  total  of  Rs.1,806.2  crore  of  interest subsidy  has  been  credited  into  the  home  loan  account  of  89,154 beneficiaries from across the country during the last three years.
- (c)  :  Under  the  Pradhan  Mantri  Awas  Yojana  (Urban)  [PMAY  (U)], States/UTs  are  undertaking  demand  survey  for  assessing  actual demand of  housing.  As  communicated  by  all  States/UTs,  the  total urban  housing  demand  assessed  so  far  under  the  PMAY  (U)  is approximately 1.20 crore which is likely to change after completion of demand validation/assessment by all States/Cities.
- (d) & (e) :  Under Credit Linked Subsidy Scheme (CLSS for EWS/LIG) component  of  Pradhan  Mantri  Awas  Yojana  (Urban)  {PMAY[U]}, beneficiaries of Economically Weaker Section (EWS) and Low Income Group (LIG) not owning a pucca house anywhere in India and seeking housing  loans  from  Banks,  Housing  Finance  Companies  and  other such identified institutions are eligible for an interest subsidy at the rate of 6.5% for a maximum tenure of 20 years.

Government of India has also launched a new Credit Linked Subsidy

Scheme  to  provide  interest  subsidy  for  housing  loans  to  eligible beneficiaries belonging to Middle Income Group (CLSS for MIG). The Scheme  covers  two  income  segments  in  the  MIG  viz.  annual household income between Rs.6,00,001 to Rs.12,00,000 (MIG-I) and annual  household  income  between  Rs.12,00,001  to  Rs.18,00,000 (MIG-II). The interest subsidy under the scheme will be available to beneficiaries  of  MIG-I  and  MIG-II  category  for  loan  amounts  upto Rs.9,00,000/- and 12,00,000/, respectively. The interest subsidy will be at the rate of 4% and 3% on the principal amount of the loan for the MIG I and MIG II beneficiary, respectively and would be credited upfront to the housing loan account of the beneficiary.

During the last three years, a total amount of Rs.2045.00 Crore has been released under the CLSS schemes as advance interest subsidy to the Central Nodal Agencies for channelizing the interest subsidy to the Primary Lending Institutions.

(f): For implementation of CLSS for EWS/LIG component of PMAY(U) mission, Ministry has identified two Central Nodal Agencies (CNAs) i.e.  National  Housing  Bank  and  Housing  and  Urban  Development Corporation  Ltd.  to  channelize  the  subsidy  to  the  Primary  lending institutions (PLIs). CNAs have, in turn, signed MoUs with PLIs such as  Scheduled  Commercial  Banks,  Housing  Finance  Companies, Regional Rural Banks, State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, Non-Banking Financial Company - Micro Finance Institutions (NBFC MFIs) or any other institution as may be identified by the Ministry.

A  total  of  1,031  beneficiaries  belonging  to  Economically  Weaker Section, Low Income Group and Middle Income Group, have availed interest subsidy under the CLSS schemes from Cooperative Banks, which constitute 1.2% of 89,154 beneficiaries under CLSS.

(g): The  Government  has  taken  the  following  steps  to  make  the rates of interest on home loans affordable:

- (i) Various fiscal incentives have been provided under section 80IBA of the Income Tax Act, which provides for 100% deduction of profits and gains for Affordable Housing projects.
- (ii) Affordable Housing has been accorded Infrastructure Status by including it in the Harmonised List of Infrastructure. This is to ensure  low  cost,  long  term  and  enhanced  resource  flow  for affordable housing.
- (iii) GST Council has lowered the effective GST rate from 12% to 8% (after deducting one third of the amount charged for the house toward cost of land) for all the houses constructed under PMAY (U).
- (iv) In Budget 2018-19, an announcement has been made to set up a separate dedicated Affordable Housing Fund (AHF) in National Housing  Bank  (NHB).  This  fund  will  facilitate  refinancing  for Private  Lending  Institutions  (PLIs)  under  (i)  beneficiary-led individual house construction or enhancement under PMAY (U) and (ii) construction of affordable housing projects.

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