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The Centre is about to finalise a scheme aimed at making housing more
affordable for the poor in urban areas, by providing them with home loans at
subsidised interest rates.
The scheme basically proposes to increase credit flow to the economically weaker sections (EWS) and lower income groups (LIG) who find it difficult to
purchase a house due to problems in getting loans from banks and the high
interest rates prevailing in the financial market.
Under the scheme, which is being given finishing touches by the Ministry of
Housing and Urban Poverty Alleviation, a five-year rebate on the interest
payable on the housing loan amount will be given to borrowers from
low-income households.
According to a senior official, the loans will be made available at reduced
interest rates by designated public sector banks and government-run lending
agencies in all states. These, in turn, will be compensated by the ministry
for the difference between market rates and the lower rates.
The minister in-charge, Kumari Selja, is said to be keenly pursuing the
scheme, which is likely to be sent for approval by the Cabinet within this
month itself. A budgetary provision of Rs 30 crore has been made for the
proposal for the current year.
“Today, non-tax payers are not able to take advantage of the fiscal
concessions available to
tax-paying home loan borrowers, which effectively
reduces interest rates on their loans. So there is a need to provide tax
neutrality by way of interest subsidy to EWS and LIG housing loan
borrowers,” the official explained.The urban areas are witnessing an acute housing shortage due to large-scale
migration of employment-seekers from villages. According to Census 2001,
about 15 per cent of the urban population lives in slums. As per the
findings of the 58th round of the National Sample Survey Organisation, there
were as many as 51,688 slums in 640 cities in 2002.
The acute housing shortage in cities is basically due to the fact that the
lowest 35 to 40 per cent of urban households, a majority of which belong to
the EWS and LIG segments, lack purchasing power. With this in view, the
government is now making attempts to bring home loans within their reach.
Resource: http://www.hindustantimes.com/storypage/storypage.aspx?id=5f99974a-6110-4a94-b221-6e506c8d884c&ParentID=78f51747-125a-46c6-9c22-e1ba6fe92971&&Headline=Easy+home+loans+for+poor+in+the+pipeline |
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