MUMBAI/ NEW DELHI, 14 MAY 2020.
The second tranche of India’s economic stimulus were measures and relief announced for migrant workers, street vendors, and small farmers.
Extension of the Credit-Linked Subsidy Scheme (CLSS) till March 2021 as also a rental housing scheme for urban poor and migrant labor in cities under PMAY were the takeaways for real estate on Day 2 of the announcements that throws light on the stimulus package. The extension of CLSS should see demand for another 2.5 lakh affordable homes, which should create demand for construction material as also provides jobs. The rental housing scheme under PMAY offers a business opportunity to the private sector, to build more rental housing stock through the PPP mode, with a concessionaire arrangement. The Finance Minister focused on moves that will improve working conditions, making life easier and more conducive for workers. Most of these were largely through changes in codes, rules and regulations; rather than direct liquidity, monetary or fiscal help.
The Credit Linked Subsidy Scheme (CLSS) which has benefited 3.3 lakh families till now, has been extended up to March, 2021and wherein other category of LIG/ EWS however continues to get extension upto March 2022. Estimated to benefit another 2.5 lakh families, it aims at providing benefits that will enable housing for the lowest strata of middle-income groups (MIG I and MIG II category income of up to 6-18 lakh/annum). Considering that majority of the home buyers falls into this category of MIG I with income from Rs 6 lakhs to Rs 12 lacs continues to gets an interest subsidy of 4 percent and MIG II category with income slab of Rs 12 to Rs 18 lacs gets interest subvention of 3 percent. Thus interest subvention support extended will spur up the potential demand of housing units resulting in to cumulative demand for construction services, building materials, finally translating into the job creation.
The Finance Minister mentioned a scheme that seeks to provide affordable rental housing for urban poor. The Indian Government will launch, under Prime Minister AwaasYojana (PMAY) a rental housing scheme which aims to provide affordable rental homes to urban poor and migrant labor in urban areas. The scheme incudes incentivizing manufacturing units/ factories to build such rental homes on their private land/ within their compounds. The scheme includes usage of empty government land to build more rental housing stock through the PPP mode, with a concessionaire arrangement similar to toll being charged by organizations building highways. The other aspect is about converting government-funded housing in major cities to affordable rental housing.
Positive moves, from the migrant labor as also urban poor perspective; some business opportunities under PP mode as also enhanced demand for construction material with the 2.5 lakh homes under CLSS, but real estate as an industry, awaits its turn to get stimulus package measures that will create a positive impact.