In a bid to boost affordable housing, the government has widened the scope of eligibility for claiming subsidy under the Credit-Linked Subsidy Scheme (CLSS) in the MIG (Middle Income Group) category. In a statement. the Ministry of Housing and Urban Affairs announced its decision to raise the threshold of carpet area of houses. Launched as part of the government’s Pradhan Mantri Awas Yojana (PMAY), CLSS is aimed at benefiting people belonging to the economically weaker section (EWS), low income group (LIG), middle income group-I (MIG-I), and middle income group-II (MIG-II) by offering interest subsidy on the loan taken for the purchase or construction of a house.
Here are 10 things to know:
1. The carpet area – or the area enclosed within the walls excluding wall thickness – has been raised to 160 square metres for MIG -I and 200 square metres for MIG-II, according to the Ministry of Housing and Urban Affairs.
2. The change in rules marks a 33 per cent increase in carpet area eligible for subsidy in the Middle-Income Group (MIG) segment. Until now, the limits of 120 square metres and 150 square metres were applicable on MIG-I and MIG-II flats, respectively.
3. “The decision is another big step to boost the construction sector that contributes to increased activity on the supply side… These enhancements will now enable more MIG customers to qualify for subsidy and avail the benefits provided under the ambitious flagship mission of Pradhan Mantri Awas Yojana (Urban),” the ministry said.
4. While the MIG I category is applicable to families with annual household income between Rs. 6 lakh and Rs. 12 lakh, the MIG II group is for those with annual income between Rs. 12 lakh and Rs. 18 lakh. “The intent of the CLSS for MIG is to support the dream of every family in owning a house.”
5. For MIG I, the interest subsidy is four per cent, eligible housing loan amount is Rs. 9 lakh and the upfront amount for subsidy is Rs. 2,35,068. For MIG II, the interest subsidy is three per cent, eligible loan amount is Rs. 12 lakh and the upfront amount for subsidy is Rs. 2,30,156.
CLSS-MIG scheme details after revision
|Particulars||CLSS for MIG|
|MIG – I||MIG – II|
|Household Income (Rs. p.a.)||From 6,00,001 up to 12,00,000||From 12,00,001 up to 18,00,000|
|Interest Subsidy (% p.a.)||4.00%||3.00%|
|Maximum Loan Tenure||20||20|
|Eligible Housing Loan Amount for Interest for Interest Subsidy (Rs.)||9,00,000/-*||12,00,000/-*|
|Dwelling Unit Carpet Area (up to)**||160 sq.m.||200 sq.m.|
|Discounted Rate for Net Present Value (NPV) calculation for interest subsidy||9.00%||9.00%|
|Upfront Amount for Subsidy (Rs.)||2,35,068/-||2,30,156/-|
*Subsidy will be restricted to this loan amount and loan quantum beyond this limit will be at non-subsidised rates.
**With effect from 01.01.2017 i.e. from the date when the scheme became operational.
6. This augurs well with the Reserve Bank of India’s policy to revise the housing loan limits for Priority Sector lending (PSL) eligibility, the ministry said.
7. The central bank last week announced its decision of raising the housing loan limits from the existing Rs. 28 lakh to Rs. 35 lakh in metros, and from Rs. 20 lakh to Rs. 25 lakh in other centres. Loans given under PSL are less expensive than those provided by the banks in their ordinary course.
8. Apart from increasing the number of beneficiaries, the increase in carpet area will improve the construction activity, and will also assist in moving the housing sector forward.
9. The CLSS for MIG scheme has gained momentum in the last couple of quarters and the offtake has picked up significantly. As on June 11, 2018, an amount of Rs. 736.79 crore has been disbursed to 35,204 beneficiaries belonging to the MIG category, said the ministry. The number of CLSS beneficiaries for Economically Weaker Sections (EWS) and Low-Income Group (LIG) is 133,213 and subsidy released for this segment is Rs. 2,890.50 crore.
10. Under the Pradhan Mantri Awas Yojana (PMAY) initiative, the government aims to provide affordable housing for all by 2022.