Centre has decided to extend the subsidy on affordable housing for the middle income group till March 2021. Announcing the second tranche of measures under the Rs 20 lakh crore economic stimulus package on Thursday, Finance Minister Nirmala Sitharaman said that the move will benefit the lowest strata of the middle income group with Rs 6-18 lakh annual income.
"For them there is a Credit Linked Subsidy Scheme, which was introduced by Government of India in May 2017... it was extended up to March 31, 2020. This scheme benefits a lot of people who want to have simple affordable houses. This link is being extended up to March 2021," FM Sitharaman said.
This extension of one year will benefit 2.5 lakh families, in addition to the 3.3 lakh middle income families that have been benefited till now, the Finance Minister said.
"By doing this, we think we will immediately be able to spur job creation. Immediately, the demand for steel, cement and heavy duty transportation will all improve. Construction materials will also come in demand. Therefore, this will have an immediate impact on the demand side," said Sitharaman.
The move is expected to bring investments to the tune of Rs 70,000 crore in the housing sector.
The Finance Minister also announced plans to launch affordable rental housing complexes (ARHCs). This move will help migrant workers and urban poor to live in cities by paying reasonable rents at these government complexes. The initiative will be rolled out under the Pradhan Mantri Awas Yojana (PMAY) by converting government funded housing in the cities into ARHCs under public-private partnership through concessionaire.
The government will incentivise manufacturing units, industries and institution associations to develop ARHCs on their private land, FM Sitharaman said. Similarly, Centre and states agencies will also be incentivised to develop and operate ARHCs, she added.