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How Real Estate Responded to Modi Govt’s Extended Credit Subsidy Scheme for Affordable Housing

In a bid to offset the effect of Covid-19 pandemic and nationwide lockdown on the economy in general and the real estate sector in particular, Finance Minister Nirmala Sitharaman has announced a 70,000 crore boost to the housing sector and Middle Income Group (MIG) through the extension of Credit Linked Subsidy Scheme (CLSS).

The CLSS for MIG with annual Income of Rs 6 to 18 lakhs was operationalised from May 2017 and was extended up to March 31 2020. The government has extended the CLSS scheme up to March 2021. This will lead to an investment of over Rs 70,000 crores in housing and will create jobs and stimulate demand for steel, cement, transport and other construction materials, the Finance Minister has said.

Here is how some players from the real estate and allied sector have responded:

‘Augurs well’
Mohit Goel, CEO, Omaxe Ltd: The extension of the CLSS scheme by one more year along with extended project completion timeline will help in addressing both demand and supply-side issues, hence, augurs well for the sector. With little more help in the form of lower GST and Stamp Duty, the real sector will be up and running soon.

‘Home Buying will be attractive Proposition’
Pradeep Aggarwal, founder & chairman, Signature Global; chairman at ASSOCHAM National Council on Real Estate, Housing and Urban Development: In the last couple of years, the subsidy of up to Rs 2.67 lakh under CLSS has been one of the biggest catalysts for home buyers, particularly for affordable housing in tier-II and III cities. With property prices remaining stable, the extension will prompt more people particularly MIG to buy homes.

‘Addresses Migrant Labour Issues’
Dhruv Agarwala, Group CEO at Housing.com, Makaan.com and PropTiger.com: The extension of CLSS by one year will prompt many of the fence-sitters to buy homes at the earliest and thereby increase demand for affordable housing wherein industry has maximum unsold inventory across the country. This will also help sustain employment as real estate supports close to 200 allied industries. The proposed affordable rental housing under PPP is a welcome step. This will help in effectively tackling any migrant labourers issues in the future.

Will Catapult the Sector’
Prateek Mittal, executive director, Sushma Group: The initial announcement by the Finance Minister is directed towards easing the liquidity in the real estate sector and delay stress for the supply-side. The announcement by the government is focused on extending the Pradhan Mantri Awas Yojana (PMAY)-CLSS scheme for MIG for boosting the demand-side as well. This comprehensive approach will go a long way to catapult the sector.

‘Interesting Developments’
Uddhav Poddar, MD, Bhumika Group: The extension of CLSS by one year will benefit the affordable housing segment, which is a key demand driver within the real estate sector. Also, the announcement by the Finance Minister of a scheme for affordable rental housing for migrant workers by converting government-funded housing in cities into Affordable Rental Housing Complexes (ARHC) under PPP mode through concessionaire is interesting and we look forward to more details of the same.

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