The Government of India has extended Credit Linked Subsidy Scheme (CLSS) by one year up to March 2021. This recent announcement will push the demand for affordable housing and will give INR 70,000 boost to the residential sector. The extension of the credit-linked subsidy scheme under Pradhan Mantri Awas Yojana (PMAY) is expected not just to benefit Economically Weaker Sections (EWS) but Middle Income Groups (MIG) also.
Credit Linked Subsidy Scheme (CLSS) is a component of Pradhan Mantri Awas Yojana (PMAY) i.e. Housing For All scheme of the Central Government to provide concession in home loan interest rates to the Economically Weaker Sections and Middle Income Groups.
Eligibility for Credit Linked Subsidy Scheme
- Economically Weaker Section – Annual income between INR 3 Lakh and INR 6 Lakh
- Middle Income Group I – Annual income within INR 6 Lakh – INR 12 Lakh
- Middle Income Group II – Annual income within INR 12 Lakh – INR 18 Lakh
The extension of Credit Linked Subsidy Scheme is expected to benefit first-time middle-class home buyers and stimulate housing demand and allied sectors. According to the Government, from CLSS has already benefited 3.3 lakh middle-class home buyers and extension by one year to benefit 2.5 lakh middle income families.
As per a research firm, currently, there are around 15.62 lakh housing units are under-construction across top seven cities, of which about 39% are in the affordable budget segment (<INR 40 lakh).
The Credit Linked Subsidy Scheme for the Middle Income Group (MIG) was first announced on December 31, 2016 and extended twice till March 2019. In December 2018-end, the government extended the interest subsidy scheme till March 2020 for first time urban home buyers with annual income between INR 6 lakh and INR 18 lakh.
This announcement was part of the second tranche of the government’s economic relief package. It is expected by various industry leaders that this will benefit around 200 allied sectors and helped in job generation also. It will positively push the demand for construction raw materials like steel, cement, transport, and other raw materials.