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Can the credit linked subsidy scheme revive realty sector?

Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme was introduced by the Ministry of Housing and Urban Poverty Alleviation to fulfil central government’s promise of Housing for all by 2022. Everyone deserves a roof over their head regardless of their economic standing in life. But that is a very utopian idea to hang on to. The real estate industry in the country is at a point where only the upper class can afford to buy a home. This means that the normal salaried class and the lower classes to fend for themselves. With increasing realty prices the Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme, is a great initiative by the government.

The government has taken cognizance of this fact and has come to the aid of the common man and his dream of buying a house. It is working towards affordable housing for all by 2022 and has instituted a credit linked subsidy scheme to ensure that those looking for affordable houses get affordable loans as well.

Affordable housing is the need of the hour. There is a big demand for homes which fall under the INR 50 lakhs category. But the number of such properties out there and the demand for them does not match at all. Most developers generally veer towards expensive properties which will make them more profits. Basically building a cheaper home does not do anything for the developer. In today’s realty market where there are very few buyers, initiatives like Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme would also motivate builders to build for the masses.

Taking into consideration the wants and needs of both the buyers and builders, the government has come up with the affordable housing scheme. The biggest problem with the real estate sector is that the pricing is really off. It’s like those who run the sector are unaware that most of the country lives on a meagre existence and is not interested nor can afford in expensive projects. They seem oblivious to this segment which is really disheartening to many.

If the government had to ensure that its scheme becomes a success, it had to ensure that both the builders and buyers get something out of it. For the developers the government has thrown them a bone by ensuring that the affordable segment has gotten the infrastructure status. By granting this status the centre has ensured that the builder community has gotten the push it needs to churn out cheaper homes.

The buyers are already getting a good deal if they get more affordable home options in the market as compared to before the time the government did not make an effort to address this demand and supply situation. Even though the homes are available people should have the money to buy them. The government has a plan to address this concern as well especially if the person is a first time home buyer.

The Pradhan Mantri Awas Yojana – Credit Linked Subsidy will help the common man if he ever chooses to opt for an affordable house. It essentially means that the government will give the first time home buyer a tax subsidy of 6.5 percent if the overall income of the household is INR 1.5 lakhs per month. These kind of incentives are always most welcomed by both the builders and buyers. It is very good for business and the economy in general. These can actually revive the sector which is going through a rather bad patch.

Kavitha Ravi for IndiaProperty.com

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  1. Informative article

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