The government is likely to increase the coverage of interest subsidy scheme for home buyers under PM Awaas Yojna (PMAY) in urban areas. The government is contemplating modification of guidelines to bring properties falling under any part of all development authorities including villages, industrial belts and even special development authorities to become eligible for interest subsidy.
The guideline will also cover areas under port development authorities in coastal cities. The interest subsidy will however, be available only for buying the first house in urban areas. The changes are being made following reports of some of the banks not approving loan applications under interest subsidy scheme in certain areas in urban localities.
For example, a couple of private banks were turning down such applications under interest subsidy scheme for properties in about 100 cities and towns, including Noida. “There have been instances when banks have raised questions about the agency or authority issuing approvals for housing projects other than the notified development authorities. Since the intention is to extend the benefit to maximum people, work is in progress to modify the guidelines that will benefit more and bring more clarity. But the projects to be qualified for this will need to get the requisite approvals,” a government official, who did not wish to be named, said.
Though in July the housing ministry had modified the guidelines to extend the interest subsidy scheme to more houses falling under area notified by development authorities such as Noida or Greater Noida, the problem still persists. Earlier only statutory towns under Census 2011 and towns notified by the state governments were eligible for coverage under PMAY.
Under PMAY, people earning between Rs 6 lakh and Rs 12 lakh annually can avail an interest subsidy of 4% for loan amount up to Rs 9 lakh. Similarly, those with annul income of Rs 12 lakh to Rs 18 lakh are eligible for 3% interest subsidy for loan amount of Rs 12 lakh.