Skip to main content

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


Popular posts from this blog

SC order on RBI circular: More options for banks to tackle defaulting firms

Lenders also have the option of restructuring the loans Lenders to companies which are under stress could now have three options to deal with them if they default on loans: take a haircut as part of a one-time settlement, restructure the loans for a longer tenure as they did when corporate debt restructuring schemes were allowed, or go to the Insolvency and Bankruptcy Code (IBC) for redress. These changes in the options available to lenders come, according to PE funds and bank lawyers who are involved in the IBC process, in the wake of the Supreme Court on Tuesday setting aside the 12 February RBI circular, which allowed a 180-day window to banks to resolve a company default.But they can still find a resolution. According to a Reserve Bank of India circular, a loan becomes a non-performing asset when banks cannot find a way of recovering their money in 90 days. In short, banks still have a window to resolve the default. Lenders can take a haircut as part of a one -time settlement of du…

April GST collections at new high despite rate rationalisation in December

Goods and services tax (GST) collection touched a record high in April, exceeding Rs 1 trillion for the third time in four months. The mop-up was 10 per cent higher over the previous year. Gross collection for the month was Rs 1.13 trillion, said the finance ministry. Despite the recent rate rationalisation in December, a rise in collection was reported. Of the total collected, the CGST (central GST) contributed Rs 21,163 crore, the SGST (state GST) Rs 28,801 crore, the IGST (integrated GST) Rs 54,733 crore (including Rs 23,289 crore on import) and cess Rs 9,168 crore (including Rs 1,053 crore on import). After settlement of the IGST and the balance IGST in a 50:50 ratio between the Centre and states on a provisional basis, the CGST stood at Rs 47,533 crore and SGST at Rs 50,776 crore. The CGST target in the Union Budget for 2019-20 is Rs 6.1 trillion. “The April collection indicates the tax base is increasing gradually, with GST getting stabilised with measures such as e-way bills and…

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…