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A. Infrastructure Status to ‘Affordable Housing’:

  • ‘Affordable Housing’ has been accorded ‘Infrastructure Status’ under the Harmonized Master List of Infrastructure Subsectors, which has been a long standing demand of the sector.
  • With the passage of the Real Estate Act, 2016 and the infusion of regulations the atmosphere was ripe for this recognition.
  • This measure will facilitate access to low cost and long term funds for the sector, which when passed on to the consumers / home buyers, will reduce the cost of affordable housing.
  • The new status will augment resource allocation for the sector which in turn will boost housing supply and reduce huge demand backlog.
  • This will also make the financial institutions (lenders) look at the sector favourably and they would have lower risk weightage in giving loans for affordable housing.
  • Thus large public sector investors such as EPFO (Employee Provident Fund Organisation) as well as Insurance Firms that are mandated to put a portion of their funds in infrastructure will look to invest in housing sector.
  • This would go a long way as a very critical supply side incentive to bring in private investment in affordable housing sector. This along with subvention schemes announced for EWS/LIG, and recently announced for MIG as well.


B. Interest Subvention for Middle Income Groups (MIG):




  • Interest subvention for Middle Income Groups (MIG), already announced by the Hon’ble PM on 31st December, 2016, has been reiterated.
  • This contemplates an interest subsidy at the rate of 4% for loans upto 9 lakhs for those having household income upto 12 lakh rupees, and an interest subsidy at the rate of 3% for loans upto 12 lakhs for those having household income upto 18 lakh rupees.
  • The scheme of interest subvention for EWS/LIG already exists under the PMAY (U) with 6.5% interest subsidy for loans upto 6 lakhs.
  • This new measure for MIG along with the earlier provision for EWS/LIG will give a huge boost to the housing sector by promoting purchases with reduced borrowing rates.


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