Budget 2017: Affordable Housing To Be Given Infrastructure Status
The government is all set to give infrastructure sector status to affordable housing, the Finance Minister Arun Jaitely announced in his budget speech. "Affordable housing will be give infra status said Jaitely
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The government is all set to give infrastructure sector status to affordable housing, the Finance Minister Arun Jaitely announced in his budget speech. "Affordable housing will be give infra status said Jaitely.
Last year, the government launched the Pradhan Mantri Awas Yojana to construct about two crore houses in the next five years for the benefit of slum dwellers, urban poor and those in the lower income and economically weaker sections.
Experts point out that this will be big boost to the real estate sector. Says Nidhi Seksaria, Advisory Partner & Leader – Real Estate, BDO India LLP: "Infrastructure status to the affordable housing segment will mean lower borrowing costs for the sector and thus addresses the margin issues that private players in this segment face. Combined with interest subventions, this could be a big step in making housing more affordable."
Earlier, President Pranab Mukherjee also said that the government is committed to providing 'housing for all' by 2022 and that Rs 24,600 crore has been sanctioned for over 4.25 lakh houses.
“Granting infrastructure status to affordable housing will provide a boost in volume of construction activity across the country. A good boost to the construction industry that was struggling with reduced number of product launches in real estate in the last couple of years” said Joe Verghese, Managing Director, Colliers International India
Earlier, Prime Minister Narendra Modi had announced a 4 per cent interest rate subvention for home loans up to Rs 9 lakh and 3 per cent interest relief for loans up to Rs 12 lakh. This captures a large portion of 'affordable housing' segment, defined as housing under Rs 25 lakh.
Real estate stocks were seen trading higher due to the announcement.