Affordable Housing development is expected to be encouraged with the announcement of a new Housing Mortgage Guarantee Fund which will cover the risk of Housing Finance Companies for lending to less advantaged sections of society.
The other four significant announcements of the Finance Minister are:
- Priority sector limit increased from Rs 20 lac to Rs 25 lac
- Relaxation of the interest subsidy on housing loans from Rs 10 lac to Rs 15 lac
- Extending investment linked incentive for construction of Affordable Housing under JNNURM and
- Permitting HUDCO to raise tax free bonds of Rs 5,000 cr in the fiscal 2011-12
These measures are a determined and appropriate policy initiative of Mr. Pranab Mukherjee. The overall impact shall be in terms of expansion in low cost housing in the country.
However, providing developed land by the State Governments is very important for giving a push to low cost housing as envisioned by Finance Minister in his Budget Speech.
Furthermore, the housing industry would have been delighted if the Finance Minister had extended Infrastructure status to the housing sector which would have given tax exemption as applicable to highways, power sector, shipping and airports apart from other benefits.
