When real estate prices refuse to come down and home loan interest rates continue to be high, there should be a flurry of activity when the Central government offers to absorb a significant part of the interest rate, right? Wrong!
The Centre’s Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (PMAY) was offering to take in upto 6% of home interest loan for those building independent homes or flats pertaining to certain size and where the annual income is from Rs. 3 lakh to Rs. 18 lakh, across a 20-year repayment period.
Under the ‘Housing for all by 2022’ concept, it was targeted at the Economically Weaker Sections (EWS), Low Income Groups (LIG) and Middle Income Groups (MIG). However, the progress was tardy with less than 2,000 beneficiaries last year in urban local bodies across Telangana, senior municipal officials informed.
A few days ago, the Centre tweaked the scheme, increasing carpet area by 33%. From houses with carpet area of upto 1,291-1,614 sq.ft. eligible for interest subsidy, it was hiked to 1,722-2,153 sq ft. Households with an annual income of upto Rs. 18 lakh can avail Rs. 2.3 lakh upfront subsidy for a home of upto 2,100 sq.ft.
Yet, merely increasing the carpet area will not help, say senior officials. “The decision to increase carpet area under CLSS is welcome, but it needs nodal banking agencies like Hudco and NHB to give the necessary push. There is certain opaqueness in the way they are operating with no proper directions to banks, public or private,” aver senior officials.
If the municipal officials are not sanguine, it is because a major effort made last year to give a push to CLSS fetched poor results. The Department of Municipal Administration and Urban Development took up a demand survey in 70-odd municipal bodies for affordable housing and received 1.66 lakh applications in LIG and MIG sectors.
“We wanted to help one lakh beneficiaries in the first year, especially outsourced, contract employees as well as those self-employed. But, we noticed lack of coordination between Hudco/NHB and other banks. Our effort to push banks individually to participate in CLSS petered out after initial enthusiasm,” rues Director of Municipal Administration T.K. Sreedevi.
In fact, a kiosk was opened in the Commissioner and Director of Municipal Administration (CDMA) office in Masab Tank with a toll-free number to help bank link up for interested beneficiaries and more such facilities were to come up in all urban areas. Alas, it was not to be with financial institutions shying away and citizens unaware of the opportunity. Will it be any different this time?