The Union Cabinet has approved a new scheme for promotion of rural housing in the country. The Centre will provide interest subsidy under the scheme. The subsidy would be available to every rural household which is not covered under the Pradhan Mantri Aawas Yojana (Grameen), or PMAY(G).
The scheme would enable people in rural areas to construct new houses or add to their existing houses to improve their dwelling units. The beneficiary who takes a loan under the scheme would be provided interest subsidy for loan amount up to Rs 2 lakh.
National Housing Bank will implement the scheme. The government would provide net present value of the interest subsidy of 3 per cent to the National Housing Bank upfront which will, in turn, pass it to the Primary Lending Institutions (Scheduled Commercial Banks, NBFCs etc.). As a result, the equated monthly instalment (EMI) for the beneficiary would be reduced.
Under the scheme, the government would also take necessary steps for proper convergence with PMAY-G including technical support to the beneficiary through existing arrangements. The new scheme is expected to improve housing stock in rural areas, as well as create employment opportunities in the rural housing sector.