Cabinet hikes carpet area for affordable housing, higher demand seen

Cabinet hikes carpet area for affordable housing, higher demand seen

The decision could help homebuyers access bigger, ready-tomove-in houses at lower costs.

In some good news for builders and middle-class homebuyers, the Union cabinet increased the carpet area of houses under the government’s affordable housing scheme on Thursday.

The decision could help homebuyers access bigger, ready-to-move-in houses at lower costs, while developers with large inventories could look forward to renewed demand, triggering a virtuous cycle of employment generation and economic growth.

The tweaks to the NDA government’s flagship housing programme—pradhan Mantri Awas Yojana (Pmay)—follows requests from the industry which was saddled with thousands of flats that had margin- ally bigger carpet areas than allowed under the scheme.

In the first middle income category (Rs6-12 lakh/annum), the carpet area was raised from 90 to 120 sq. m (968 sq. ft - 1184 sq. ft).In the income category of Rs12-18 lakh/annum, the carpet area was increased from 110 sq. m to 150 sq. mt (1291 sq. ft – 1614 sq. ft).The eligibility criteria and interest subsidies on loans remain unchanged.

“The increase in carpet area will enable individuals under the MIG category to have a wider choice in developers’ projects. It will give a boost to the sale of ready built flats in the affordable housing segment,” Union housing and urban affairs minister Hardeep Puri told journalists.

The mushrooming of private developers from 2007 to 2013 saw landowners turn real estate companies.The obvious fall out was incomplete projects, and a breakdown of consumer and investor confidence. But realty majors said that RERA has added a positive dimension to the sector.The affordable housing sector was given a shot in the arm by the government in its budget this year, as it gave it the status of infrastructure.

This allowed tax holidays and easier access to credit for developers in this segment.“Consumer sentiment for affordable homes has been on a rise from the past three quarters with the benefits of the changes in the real estate sector bearing fruit,” said Brotin Banerjee, chief executive officer (CEO) and MD, Tata Housing. With the changes, the cost of a house will go up but Sriram Kalyanaraman, managing director (MD) and CEO of National Housing Bank (NHB), told HT that it would still be affordable for the MIG category.

“In a city like Aurangabad, a person with a salary of Rs12 lakh can easily get a loan of Rs40 lakh. With that he can easily afford to buy a house of 1184 sq. ft,” said Kalyanaraman who heads NHB, the regulator for all housing finance compa- nies. PMAY was initially targeted to benefit those with incomes up to Rs6 lakh a year.Last December, Prime Minister Narendra Modi announced expanded its ambit to include the middle-classes till December 2017.But in September, the government extended the scheme for the category to March 2019.

The Union finance ministry had allocated 1,000 crore under the programme. The ministry intends to target 50,000 people under the scheme in 2017-18.“Now we will be able comfortably provide a two-bedroom house in the MIG category, the benefits under the infrastructure category that developers get will be passed on to the homebuyers,” said Pradeep Jain, founder chairman, Parsvnath Group.

The Hindustan Times, New Delhi, 13th June 2018

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said. Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm

Credit card spending growth declines on RBI gaze, stress build-up

Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem. “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and

CA Online

Search This Blog