Click to play videoNew Delhi: The Delhi Development Authority (DDA) put low-priced flats on sale last month. The sale after a gap of four years saw over eight lakh applications for around 5000 one, two and three bedroom flats.
However, rather than housing the needy, the lottery scheme might have ended up enriching the greedy.
But for those who are lower down on the income ladder than those standing in DDA queues, the Ministry of Housing plans to ease their plight of owing better homes.
The Ministry of Housing wants to persuade banks to give housing loans to the urban poor at a 5 per cent interest rate.
Chief managing director (CMD), National Housing Bank S Sridhar says, “I think it is in a fairly advanced stage whereby an interest subsidy is going to be made available for housing loans for the urban poor.”
The Ministry of Housing is considering such a proposal whereby an interest subsidy will be available for the urban poor.
These are households earning 3300 and 7300 a month, described in government-speak as economically weaker sections an low income groups.
Sridhar says, “Justification is that when income tax payers take housing loans, they are entitled to deduction both on principal repayments and interest. A non income tax payers with income up less than Rs 1 lakh does not get access, and pays a higher interest rate and even if he does, he gets no concession. For people like us (tax payers) our post tax EMI is actually lower than that of a driver.”
The National Housing Bank has calculated that a five per cent subsidy on home loans would be equal to the benefit that income tax payers get from housing loan and interest deductions.
The rebate will be limited to loans up to one lakh rupees but will extend to the life of the loan, which could be up to 15 years.
The plan allocation has been with four lakh houses in mind. This is an open-ended scheme, and the subsidy will increase with rising demand.
Officials at the Ministry Of Housing and urban poverty alleviation did not speak citing the model code of conduct.
However, it has been gathered that the expenditure and finance committee headed by the expenditure secretary has approved the proposal.
There is a plan allocation of 1100 crore and a budgetary allocation for this year has been approved by parliament.
The scheme is being drafted and will be implemented once the Cabinet Committee on economic affairs gives its assent.
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