The recent reported developments, particularly over the last couple of months , are an indication that homebuyers are receiving the much-needed attention and the government is providing utmost priority to their issues.
Firstly and most importantly, the government has cleared an ordinance amending the Insolvency and Bankruptcy Code (IBC), which now recognizes homebuyers as financial creditors to real estate developers.With this, homebuyers have a reason to cheer as according to the Insolvency and Bankruptcy Code Amendment Ordinance, 2018, they will get representation in the Committee of Creditors (CoC) that takes a call on resolution proposals , essentially making them an integral part of the decision making process.
Last week, in another major decision to bolster affordable housing and construction sector leading to enhanced economic activity, the government increased the carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for the Middle-Income Group (MIG) under Pradhan Mantri Awas Yojana (Urban).
As per the reported revised norms, the Ministry of Housing & Urban Affairs has enhanced the carpet Area of houses eligible for subsidy under CLSS for MIG to 160 sq meter or 1,722 sq ft for MIG -I and 200 sq meter or 2,153 sq ft for category MIG-II. Earlier the carpet area for these houses under MIG I and MIG II category was fixed at 120 sq meter or 1,291 sq ft and 150 sq meter or 1,614 sq ft.
The upward revision will now enable more MIG customers to qualify for subsidy and avail the benefits provided under the ambitious flagship Mission of Pradhan Mantri Awa s Yojana (Urban).
This move is another key step to boost the construction sector that contributes to increased activity on the supply side. This initiative is expected to result in enhanced economic activity that would contribute to improvement in the demand side.
Apart from this, the Reserve Bank of India also recently took a decision to increase priority sector lending (PSL) slabs that will allow first-time homebuyers avail higher loans at better terms. RBI has revised the housing loan limit for PSL to Rs 35 lakh from Rs 28 lakh in metros with a population of 10 lakh and above and to Rs 25 lakh from Rs 20 lakh in other centres, provided the overall cost of the dwelling unit in the metros and at other centres does not exceed Rs 45 lakh and Rs 30 lakh. government has supported the housing sector through affordable housing fund, lower goods & services tax (GST) rates, increased tenure of loans under the Credit-Linked Subsidy Scheme (CLSS) of PMAY and extended income tax benefits to apartments of up to 645 sq ft carpet area.All of these developments, in addition to setting up of regulator for real estate sector through Real Estate (Regulation & Development) Act, 2016 that was notified and implemented last year, are aiming to put the spotlight on the most important entity, homebuyers.