I-Day credit scheme for poor set to be rolled out
The Indian government is set to launch a ₹60,000 crore-urban housing credit scheme to help low-income citizens own their own homes, as announced by Prime Minister Narendra Modi on Independence Day. The scheme, which will provide affordable credit for poor and middle-class housing, is expected to be launched soon and will offer interest subvention of 3-7% to eligible applicants. This new scheme will be separate from the existing Pradhan Mantri Awas Yojana-Urban (PMAY-U). The move is also expected to boost the domestic economy and benefit the Bharatiya Janata Party (BJP) in upcoming elections.
The government may soon launch a ₹60,000 crore-urban housing credit scheme for low-income citizens aspiring to have their own houses in line with Prime Minister Narendra Modi’s Independence Day announcement, which would also boost the domestic economy, two officials aware of the development said.
This was one of the announcements made by the Prime Minister from the ramparts of the Red Fort on August 15. The blueprint of the scheme is ready and reviewed by the competent authority, the people said, requesting anonymity. The PM on Saturday held a meeting to review announcements made in his Red Fort speech, a statement issued by the Prime Minister’s Office said.
“In his Independence Day speech, Prime Minister had mentioned about ensuring affordable credit for poor and middle class housing. In line with this announcement, Prime Minister reviewed the preparations to implement this announcement,” it said.The PM also reviewed the road map to execute his plan of ensuring solar power for households, it added. The meeting was attended by his principal secretary PK Mishra and cabinet secretary Rajiv Gauba among others.
In his Independence Day speech, highlighted plights of the weaker sections living urban centres on rented accommodations, the PM promised to launch an easy home loan scheme for them. “Middle-class families are dreaming of buying their own houses. We are coming up with a new scheme in the coming years that will benefit those families that live in cities but are living in rented houses, or slums, or chawls and unauthorized colonies. If they want to build their own houses, we will assist them with a relief in interest rates and loans from banks that will help them save lakhs of rupees,” he said.
“Subject to a final decision of the competent authority [cabinet approval], a ₹60,000 crore interest subvention scheme for eligible urban dwellers is expected to be launched soon for a period of three to five years,” one official mentioned above said. According to experts, the scheme will also brighten the poll prospects of the BJP in Rajasthan, Madhya Pradesh and Chhattisgarh.
Eligible applicants may get 3-7% of interest subvention under the scheme, depending on the loan amount and repayment period, a second person said. “The difference (between interest rates prevailing in the market and offered under the scheme) will be borne by the government,” he added.
This will be a new scheme, distinct from the Pradhan Mantri Awas Yojana-Urban (PMAY-U), the first official said. The flagship scheme of the Modi government is being implemented since June 2015 providing all-weather pucca houses to eligible beneficiaries. Last year in August, the Union cabinet approved continuation of the PMAY-U up to December 31, 2024. According to latest official data (as on October 3), out of the total sanctioned amount of ₹1,99,944 crore under the scheme, ₹1,53,486 crore has been released while expenditure to the tune of ₹1,43,256 crore has been made.
The Prime Minister on August 15 said that housing for all is one of the key aims of his government. “Earlier, ₹90,000 crore was spent to build houses of the poor; today it has increased four times and more than ₹4 lakh crore is being spent to build the houses of the poor,” he said.
The government’s other flagship scheme PMAY-Gramin is constructing about 30 million pucca houses with basic amenities.
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