Govt To Offer Slum Residents Bank Loan Interest Subsidy

Government plans to offer interest subsidy on bank loans for those living in urban slums, chawls, rented houses and unauthorised colonies to have their own houses. 

The interest subsidy scheme, which will be announced soon, is seen as a bonanza for several poor and middle class people in towns and cities, who could not avail of the benefits of PM Awas Yojna (PMAY) in urban areas. Under PMAY for urban areas, the Centre provided Rs 1 lakh for in-situ slum redevelopment (ISSR), Rs 1.5 lakh f or affordable housing in partnership (AHP) and beneficiary-led individual construction or enhancement (BLC) verticals of the scheme. 

Besides, there was a Credit Linked Subsidy Scheme (CLSS) vertical, which offered subsidised loans of up to almost Rs 2.7 lakh per house at 6.5%. This was offered to people who were economically weak or from lower income groups but the scheme ended in March 2022.

The new scheme is likely to be under the CLSS category. Apart from offering better quality housing, the scheme could provide a boost to low-cost housing, which in turn has the potential to provide a further fillip to the construction sector, a large generator of jobs and a segment that will create more demand for inputs such as cement and steel.