A little over two years since the launch of the Credit linked Subsidy Scheme (ClSS) for housing loans for the economically weaker sections and lower income group, there are only a few takers —just 43,166 to be precise. The Prime Minister Awas Yojana was intended to benefit 1.5 crore beneficiaries.
At a review meeting, it was found that the scheme is unable to reach the poor and economically backward population in cities and towns. The meeting was called by Secretary (Urban Development) Durga Shankar Mishra. Mishra expressed concern as both private and public sector banks have failed to implement the scheme properly. At the meeting, it was also felt that the scheme was not advertised properly.
In fact, the scheme that was extended to the middle income groups a few months ago too has witnessed just 250 persons availing of the benefit of a 4 percent and 3 per cent subsidy on a housing loan of Rs 9 lakh and Rs 12 lakh respectively.
Sources in the Ministry of Housing and Urban Affairs told The Pioneer that as per data, financial institutions made up for 75 per cent of the loans sanctioned under this scheme while the public sector and private sector banks provided only 12 per cent and 11 per cent finance respectively.
The data shows that total Rs 824 crore was given as home loan subsidy among 43,166 beneficiaries under the scheme for PM Awas Yojana to EWS and lIG category people. As far as middle income group is concerned, only Rs 5 crore was given as subsidy to 250 beneficiaries till date.
The ClSS component of PMAY(Urban) was launched in June, 2015 and it is applicable to Economically Weaker Sections (EWS) and low Income Group (lIG) covers urban poor with income levels of Rs 3 lakh and Rs 6 lakh per year. The scheme was extended to the middle income group in March this year.
PMAY scheme aims to transform slum areas by building homes for slum dwellers in collaboration with private developers. It plans to give a credit-linked subsidy to weaker and mid income sections on loans taken for new construction or renovation of existing homes.
An interest subsidy of 3 per cent to 6.5 per cent has been announced for loans ranging between Rs 6 lakh and Rs 12 lakh. For those in the EWS and lIG category who wish to take a loan of up to Rs 6 lakh, there is an interest subsidy (concession) of 6.5 per cent for a tenure of 15 years.
To bring more people under affordable housing scheme, the Ministry extended the scheme to middle income group people having annual income of up to Rs 12 lakh in urban areas , there is an interest subsidy of 4 per cent for a home loan up to Rs 9 lakh this year.
A 3 per cent rebate will be given on Rs 12 lakh loan availed by those who earn up to Rs 18 lakh annually. In rural areas, interest subvention of 3 per cent is offered on loans up to Rs 2 lakh for constructing new homes or extension of old homes.
According to the Ministry, 70 lending institutions including 45 Housing Finance Companies, 15 scheduled banks, two Regional Rural Banks, one Cooperative Bank, four Small Finance Banks and three Non-Banking Finance Companies-Micro Finance Institutions have signed Memoranda of Understanding with National Housing Bank (NHB) for implementation of ClSS (MIG) component of PMAY(Urban).