International rating agency Moody's has just upgraded India's rating from Baa3 to Baa2. Moody's last upgraded India's rating, way back in 2004. This is a major boost to the Government and also shows the success of reforms like Demonetization and GST.
The Government is back to focusing on its pet project, affordable housing. The Government launched an ambitious project called Pradhan Mantri Awas Yojana (PMAY), way back on June 1st 2015. This scheme aims to offer "pucca" houses (houses made of brick, stone, timber, cement or concrete) to the urban and rural poor under "Housing for All by 2022."
The Government launched PMAY to provide affordable houses for the Lower Income Groups (LIG), Economically Weaker Sections (EWS) and also the Middle Income Group (MIG). Want to know more on home loans? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
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Prime Minister Narendra Modi, wants all middle class Indians to get their dream home. So the Credit Linked Subsidy Scheme (CLSS) for the Middle Income Group (MIG), was launched under PMAY.
If you have an annual income between Rs 6 Lakhs to Rs 12 Lakhs, you come under the MIG-I category. For you and other citizens under MIG-I, you get a 4% interest subsidy on a home loan up to Rs 9 Lakhs.
If you have an annual income between Rs 12 Lakhs to Rs 18 Lakhs, you come under the MIG- II category. For you and other citizens under MIG-II , you get a 3% interest subsidy on a home loan up to Rs 12 Lakhs.
1. PMAY gives you a higher carpet area
If you are buying a residential house or a residential apartment, the first thing you must check is the carpet area. This is the area enclosed within the walls of your house. This is the actual area where you lay the carpet.
Now there's good news. If you fall in the MIG-I category, the carpet area of houses has been increased from 90 square meters to 120 square meters. If you are in the MIG- II category, the carpet area of houses has been increased from 110 square meters to 150 square meters.
Let's say you have a household income between Rs 6 - 12 Lakhs. You fall in the MIG-I category. You get an interest subsidy of 4%, on a loan up to Rs 9 Lakhs. The loan tenure is 20 years and you enjoy a carpet area of 120 square meters. You enjoy a loan subsidy of Rs 2.35 Lakhs.
Let's say you have a household income between Rs 12 - 18 Lakhs. You fall in the MIG-II category. You get an interest subsidy of 3%, on a loan up to Rs 12 Lakhs. The loan tenure is 20 years and you enjoy a carpet area of 150 square meters. You enjoy a loan subsidy of Rs 2.30 Lakhs.
Experts claim that the success of this scheme depends on the carpet area of the apartments. The carpet area has now been increased from 90 square meters to 120 square meters under the MIG-I category. It has increased from 110 square meters to 150 square meters under the MIG-II category.
The earlier carpet area was too small for houses and apartments in tier 2 cities. The increase in carpet area will be a major boost to affordable housing in India.
Affordable housing enjoys Infrastructure Status. The Government is really serious about the "Housing for All by 2022" scheme. A very popular mutual fund has even launched an NFO (New Fund Offer), based on the theme, affordable housing. Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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