Ahmedabad: Realtors hail changes in subsidy norms for MIG homes

A combination of Centre's move on Tuesday to raise the carpet area for the middle-income group (MIG) and the RBI's move last week to raise loan amount in metro and non-metro cities would enable people to buy larger houses and seek a higher loan amount, observed city-based realtors.

The subsidy benefits would also add to the major push that the housing sector is likely to receive in about a week's time.

Ministry of Housing and Urban Affairs (MoHUA) on Tuesday announced that Credit Linked Subsidy Scheme (CLSS) has raised the carpet area for MIG-1 scheme from 120 square meters to 160 sq mt, while those for MIG-2 scheme has been raised from 150 sq mt to 200 sq mt.

Last week, the Reserve Bank of India (RBI) increased the loan limits under Priority Sector Lending (PSL) from Rs 20 lakh to Rs 25 lakh in non-metro cities and from Rs 30 lakh to Rs 35 lakh in metro cities.

Calling it the government's gift to the MIG, Jaxay Shah, President, Confederation of Real Estate Developers Association of India (CREDAI), said, "Increase in carpet area of houses eligible for interest subsidy under CLSS will boost to government's aim to provide housing for all."

"Earlier, people were forced to buy smaller houses because of the cap in loans. The raise in limit for loan and carpet area will encourage sales of homes, particularly in smaller cities," said Vijay Shah, MD of Ahmedabad-based Vijay Builders Pvt Ltd.

Realtors are betting high on an affordable segment for sales as the mid-segment is not giving them the sales witnessed in the previous decade.