Interest Subsidy Available For Bigger Homes under CLSS: PMAY

-Effective change for housing demand, helpful in clearing unsold stock

The government declared that under the government’s credit linked subsidy scheme (CLSS) the owners of the home in the middle age group (MIG) are eligible to avail the benefit of interest subsidy for bigger carpet area homes. This will help the real estate sector to grow better and the unsold stock will get the positive results.


CLSS has launched two income segments for MIG covers in the MIG as Rs. 6,00,001 to Rs. 12,00,000 (MIG-I) and Rs.12,00,001 to Rs.18,00,000 (MIG-II) per annum. An interest subsidy in the MIG-I, of 4% has been provided for loan amounts up to Rs.9 lakh while in MIG-II, an interest subsidy of 3% has been provided for a loan amount of Rs.12 lakh.

The prime minister approved the increase of carpet area in the MIG-I category of CLSS from the existing 90 square meter to up to 120 square meters and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square meter to up to 150 square meters, by the meaning of Carpet area, it is the area within the walls, while this area does not include the thickness of the inner walls. These changes are effective from January 1, 2017.

The developers will be able to launch new projects as this decision will help to clear the unsold stock. As according to National Real Estate Development Council (NAREDCO), this step would enhance the interest for affordable housing under the interest subvention scheme for almost 96% of the total demand for housing in the country.

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Shri Narendra Modi proclaimed in his speech on 31st December 2016, that for people belonging to the MIG category, under the CLSS – Pradhan Mantri Awas Yojana is valid until the end of December this year. But later the government extended the validity of interest subsidy benefit by 15 more months, which is now until March 2019.

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