Pradhan Mantri Awas Yojana Loan upto 12 Lakhs to get 3% Interest Subsidy Discount
In yet another historic address to the nation, PM Narendra Modi gave a number of gifts to the nation on the eve of New Year. On 31st December, 2016, PM Modi made some vital announcements, which would benefit the common people in the nation. These common people include small businessmen, farmers and consumers, who try to live an honest life.
Nation Still Has Homeless People
During his address to the nation, PM Modi clearly stated that even after 60+ years independence from British Rule, the nation is plagued by a very vital problem of housing. Millions of Indian still don’t have their own home and on the other hand, a handful of greedy, shameless and inhuman people have hoarded lakhs of crores of black money. Those black money hoarders used real estate as one of the channels for their dirty money.
In the process, those handful of people managed to create an inflationary pressure in real estate prices, making houses out of reach of the common middle class people. To deal with this problem, the government first introduced the Pradhan Mantri Awaas Yojana and then gave a massive blow on the black money hoarders and corrupt people in form of demonetization.
3% Interest Subsidy on Home Loans of Up to 12 Lakhs
PM Modi stated that the Pradhan Mantri Awaas Yojana was meant to increase the supply of houses to combat the high prices of real estate.
Second, the demonetization drive will lead to a price correction in real estate through a deflationary move of prices.
Finally, an interest subsidy on new loans under the Pradhan Mantri Awaas Yojana will help to boost housing demand in both rural and urban sectors in the economy.
Modi stated that loans that will be taken out under Pradhan Mantri Awaas Yojana in year 2017 will become eligible for the subsidy. PM stated that in order to ensure that poor people and middle class people in India manage to purchase new homes, the government introduced two new middle income categories in the existing Pradhan Mantri Awaas Yojana.
Though PM did not name the newly created categories, he did clearly state that interest subsidy of 4% and 3% will be given to home loans of up to 9 lakhs and 12 lakhs respectively. So, going reverse, one of the categories will be low income group who cannot afford loans above 9 lakhs and another category will be slightly higher income group who cannot afford loans above 12 lakhs (this is just an assumption).
So, 3% interest subvention for loans up to 12 lakhs is one of the key highlights. Here are some important things you need to know:
- Loans up to 12 lakhs taken in 2016 will not qualify for this 3% interest subsidy. Only new loans taken in 2017 will enjoy the subsidy.
- Loans should be taken under Pradhan Mantri Awaas Yojana.
- This interest subsidy is applicable only for urban areas of the country as the new middle class categories which have been created are for urban areas only.
It is expected that this new interest subsidy will boost the demand for new houses in India while still containing an inflationary pressure on housing prices because of correction caused by demonetization and increased supply under Awaas Yojana.
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