Budget 2017: Centre raises CLSS loan tenure to 20 years

The Centre on Wednesday approved extension of tenure of loans under Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) to 20 years from 15 years and introduction of a new CLSS for middle income group with a provision of Rs 1,000 crore in 2017-18.

"The Union Cabinet chaired by Prime Minister Narendra Modi has given ex-post facto approval to the proposals for extension of tenure of loans under the CLSS vertical of Pradhan Mantri Awas Yojana (Urban) Mission from 15 to 20 years," said an official statement.

According to the statement, the scheme will be renamed as CLSS for EWS/LIG — for economically weaker sections (EWS) of society/Lower Income Group (LIG). Besides, the Cabinet approved the introduction of a new Credit-Linked Subsidy Scheme for the Middle Income Group (MIG).

The government has proposed to construct 1 crore houses for the homeless by 2019. The PMAY allocation has been raised to Rs 23,000 crore, from Rs 15,000 crore.

The government has also allowed primary lending institutions (PLIs) that have signed MoU with central nodal agencies (CNAs), under the CLSS vertical of PMAY (Urban) (now CLSS for EWS/LIG), the option to extend the mandate of their MoU to CLSS for MIG with appropriate changes as applicable.

It also cleared the proposal for rationalising or introducing the processing fees payable to the PLIs for the loans sanctioned under these schemes.

The government has allocated Rs 1,000 crore initially in the Budget for 2017-18 at the BE (budget estimates) stage for the proposed CLSS for MIG. It also approved issuance of operational guidelines for CLSS for MIG with approval of the minister-in-charge.

The objective is to increase the off-take in EWS and LIG segments under the existing Pradhan Mantri Awas Yojana (Urban)— Housing for All Mission and reach out to MIG.

Besides, it will make procedures easy for PLIs and provide an incentive to them for higher participation in the housing and urban development sector.

The scheme will make available funds through budgetary provisions and clearly define the procedure and implementation of the programmes.

The outreach will ensure greater participation among the EWS, LIG and MIG segments to provide Housing for All by 2022, ensuring equity and inclusiveness.

The interest subsidy to be disbursed to the beneficiaries will be credited to their home loan accounts after the PLIs have satisfied the eligibility criteria through due diligence.

The proposed interest subsidy scheme for MIG is an innovative approach to address the needs of housing of this category, it said.