PMAY – FindMyProperty

The Reserve Bank of India made a decision to increase the limits on loans for PSL (Priority sector lending) which may assist in the first-time homebuyers get greater amounts of loans at better terms which in turn may boost the sales of Affordable Houses.

RBI revised the housing loan limit for PSL from Rs 28 lakh to Rs 35 lakh in cities with a minimum population of 10 lakh and from Rs 20 lakh to Rs 25 lakh in other cities. This is on condition that the overall cost of the house does not exceed Rs 45 lakh for metropolitan cities and Rs 30 lakh for other cities.

The RBI has also raised concerns over rising minor crimes and suggests at lesser loan to value of the property.

Reduced home loan interest rates and necessary impetus by the government has helped to boost sales of the affordable housing sector. The housing sector has been supported by the government through lower GST rates, affordable housing fund, increased duration of loans CLSS of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of maximum carpet area of 645 sq ft.

According to Khushru Jijina, MD of Piramal Finance & Piramal Housing Finance the decision would up the sales of affordable houses which will in turn help in economic growth.

The rating agency CRISIL is of the view that the decision will allow most of the housing loans given by banks to qualify for PSL which would be positive for the banks. CRISIL also added that as of April 2018, 37% of the housing loans given by the banks qualified for the PSL.

Since forming the government in 2014, the BJP-led NDA government has given consent to the construction of 45.86 lakh houses in metropolitan cities, registering an increase of nearly 240 percent when compared to the UPA governments 10-year tenure, as per official data.

Construction of 13.45 lakh houses was approved during UPA I and II under two schemes – Rajiv Awas Yojna (RAY) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM), as stated by housing and urban affairs ministry data.

A senior official while quoting the data said that the 45.86 lakh houses have been sanctioned under the flagship scheme – Pradhan Mantri Awas Yojna (PMAY).

Under PMAY (Pradhan Mantri Awas Yojna), the government plans to construct around 1.2 crore houses for the urban poor by 2022.

The central assistance affirmed by the UPA government was to the tune of Rs 20,303 crore for development of 13.45 lakh houses for poor people, while the NDA government has endorsed Rs 70,716 crore for development of authorized 45.86 lakh houses up until this point, as indicated by the data.

Development of 8.04 lakh houses was finished in the UPA’s administration, while 7.25 lakh houses, including the houses left under the JNNURM and RAY, were built since the NDA government came to control in 2014, the authority said citing the data.

During its 10-year tenure, the UPA government released Rs 17,989 crore for the development of the houses, whereas the NDA government has released Rs 25,264 crore for the development of houses for urban poor.

The remarks came as a counter to Congress MP K C Venugopal attacking the administration over the usage of the scheme, asserting that the nationalised banks were not giving loans to the poor and that PMAY was ‘failing’.

Hardeep Singh Puri, Housing and Urban Affairs Minister has countered the lawmaker’s claim, saying that the scheme was a ‘roaring success’.