Millennium Post

Govt ups eligibility for 5% interest subvention 5-fold

In a move to make finance cheaper for weaker sections of the society, the government will soon be massively expanding the eligibility cap for the 5 per cent interest subvention scheme to Rs 5 lakh
from the current Rs 1 lakh, a top official said on Wednesday.

‘The eligibility limit (for 5 per cent interest subvention) will be increased to Rs 5 lakh from the present Rs 1 lakh. The new scheme interest subsidy scheme will be announced soon,’ Financial Services Secretary G S Sandhu said while addressing a realty summit organised by the industry body Nardeco here.

Earlier, addressing the same gathering, RBI deputy governor S S Mundra said housing shortage is very severe among the weaker sections, and pointed out to the findings of an RBI internal panel which say over 58 per cent of people from the economically weaker sections and over 39 percent from the low income groups do not have access to housing.

Under the subvention scheme, the government shares the interest burden on a loan for the particular target segment and such schemes exist of a slew of sectors, including the agriculture.

Sandhu said the government has to ensure that financing is available at affordable prices and conceded that commercial banks have a limitation due to cost of funds.
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