PM lives up to his promise as cabinet approves interest subsidy scheme

Living up to Prime Minister Narendra Modi new year eve promise, the Union cabinet approved in a meeting held today three per cent interest subsidy on loans up to Rs 2 lakh for all households which are not covered under Pradhan Mantri Aawas Yojana (Grameen).

The move will certainly be welcomed by large sections of population of the country who still do not have permanent shelters to live in. The interest subvention scheme is aimed at providing relief from higher interest rates as government would be partly bearing the interest burden of the people.

The interest subsidy will not only help in reducing EMI for an individual but, at the same time, give a thrust to housing sector in the country in line with the government aim of providing ‘Housing for All by 2022’.

The interest subsidy would be available to every rural household, which is not covered under the PMAY(G), under which the government aims to construct about 44 lakh houses, the rural development ministry said in an official release.

Owing to this development, housing finance companies and banks are likely to hog the limelight in tomorrow’s trading session. Housing finance companies up till now have delivered positive numbers and it is expected that all the players will push aggressively for a pie of the housing loan in times to come.