Government extends CLSS scheme by a year for first-time homebuyers

The government has extended the Credit Linked Subsidy Scheme (CLSS) for MIG Scheme by a year until March 31, 2020, Housing and Urban Affairs minister Hardeep Singh Puri said on December 31.

“The growth and performance of CLSS for MIG scheme has been very good and we are on course to having about one lakh beneficiaries by the end of this year,” he told reporters.

More than 68.7 lakh houses have been approved so far for construction under the Pradhan Mantri Awas Yojana (PMAY-U) Mission. Out of these, 37 lakh houses are under various stages of construction of which 13.5 lakh houses have already been completed.

Under the PMAY(U), the total investment involved is Rs 3.85 lakh crore. Rs 34,000 crore have already been released to States/UTs out of the approved total central assistance of Rs 1.05 crore. An interest subsidy of Rs 7,543 crore on housing loans has been credited directly to 3.39 lakh beneficiaries under CLSS (Credit Linked Subsidy Scheme), said ministry sources.

A National Urban Housing Fund for Rs 60,000 crore has been set up for raising Extra Budgetary Resources (EBR) for the rapid implementation of PMAY (U). A sum of Rs. 8,000 crore was mobilised under this fund in FY 2017-18. In FY 2018-19 approval has been secured to raise Rs. 25,000 crore under this mechanism out of which a sum of Rs 5050 crore has been already raised and disbursed to the States/UTs and CNAs (Central Nodal Agencies). This process of raising resources through EBR ensures that there will be unhindered availability of resources for PMAY(U).

The Affordable Housing Fund (AHF) was established in National Housing Bank (NHB) with an objective to improve the affordability of the target group to own their homes. The first tranche of Rs. 2,500 crore which was received by NHB in Aug 2018 out of the total corpus of Rs. 10,000 crore has already been disbursed.  The next tranche of Rs 2,500 crore is expected to be received by NHB soon.

Experts said the extension of the CLSS timeline will help both buyers and the construction sector and improve investments. The top three states that have performed well under the CLSS segment include Gujarat, Maharashtra and Uttar Pradesh, sources said.

The Credit Linked Subsidy Scheme for the Middle Income Group (CLSS for MIG) was announced by Prime Minister Narendra Modi on December 31, 2016.

It was initially launched for 12 months until December 2017 and covered MIG beneficiaries seeking housing loans for acquisition/ construction of houses (including re-purchase) from banks, housing finance companies and other notified institutions. The proposal for extension of the scheme was considered based on the inputs from various stakeholders in the month of October 2017 and was accorded approval for extension by 15 months up to March 31, 2019.

For the MIG I category, which consists of individuals with an annual income of Rs 6-12 lakh, an interest subsidy of 4 percent is provided on a loan of up to Rs 9 lakh. For the MIG II category, which is made up of individuals with an annual income of Rs 12-18 lakh, an interest subsidy of 3 percent is given on a loan of up to Rs 12 lakh.  The benefits are typically in the Rs 2-2.5 lakh range.The carpet area of a housing unit was initially revised to up to 120 sq m and up to 150 sq m  for MIG I and MIG II respectively in November, 2017 and further enhanced to up to 160 sq m and up to 200 sq m for MIG I and MIG II, respectively in June, 2018.

CategoryNo of beneficiariesSubsidy released in Rs/crore

Source: MoHUA