Cabinet has approved an increase in carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS). This will be applicable for the Middle Income Group (MIG) under PMAY. It will come into effect from January 1, 2017.
While under the MIG-I category, the carpet area of the houses has been increased from 90 square metre to 120 square metre, the area under MIG-II segment, has been increased to 150 square metre from the current 110 square metre.
Under the MIG-I category, a four-per cent interest subsidy is provided to the beneficiaries, whose annual income is between Rs. 6 lakh and Rs. 12 lakh on a loan of up to Rs 9 lakh. On the other hand under the MIG-II category, the beneficiaries with an annual income of Rs 12 lakh to Rs 18 lakh get an interest subsidy of three per cent on a loan of up to Rs 12 lakh. PMAY aims to provide houses to all the urban poor by 2022.
Carpet area is the area enclosed within the walls i.e. actual area to lay the carpet. This excludes the thickness of the inner walls. Builders as of today are charging buyers on the super built-up area, which includes area of outer walls, balcony and lobbies, stairs and even elevators.
RERA is against the practice of super built up area and want to remove it. However, under PMAY, the area of the house is different for all categories and it’s the carpet area and not the super area that is to be looked at.
Realtors’ body CREDAI and NAREDCO hailed the government’s decision to hike carpet area of houses eligible for interest subsidy under the Pradhan Mantri Awas Yojana-Urban, saying the move would help middle income buyers and help the sector in clearing unsold homes.
NAREDCO’s Chairman Rajeev Talwar and President Niranjan Hiranandani said this decision would help in meeting the aspiration of millions of MIG (middle income group) home buyers.
“This decision of government, besides helping in clearing unsold stock, will also encourage developers to launch new projects and boost economy, GDP growth and employment,” they said, adding that the move would now bring the entire demand for affordable housing under the interest subvention scheme.
CREDAI’s President Jaxay Shah said: “Housing for All by 2022 has taken a huge leap forward by the increase in unit size of MIG Houses under Credit Linked Subsidy Scheme.”
“The average middle class in smaller towns and cities would now be able to afford bigger and better quality homes than before,” Shah added.