In a move to boost the realty sector, the Centre is planning to fund 1% of interest payments on loans of up to Rs. 15 lakh where the cost of the house does not exceed Rs. 25 lakh.
The cabinet committee on economic affairs will discuss the proposal next Tuesday. And loans taken from scheduled commercial banks and housing finance companies will be considered for subsidy.
Earlier, the subsidy scheme covered loans of up to Rs. 10 lakh with the cost of construction not exceeding Rs. 20 lakh. The new proposal was announced by Pranab Mukherjee in his last budget.
The Centre estimates the total disbursal in 2012-13 in the Rs. 15-lakh loan bracket at Rs. 55,000 crore. Of this, 80% (Rs. 44,000 crore) will go towards funding those under the Rs. 25-lakh construction cost bracket.