EFC is chaired by the Expenditure Secretary in case of all schemes of the Central Government where the budgetary allocation is in excess of Rs 500 crore.

“The EFC has approved the proposal. The Cabinet will likely take it up soon,” an official aware of the matter told FE.

EFC is chaired by the Expenditure Secretary in case of all schemes of the Central Government where the budgetary allocation is in excess of Rs 500 crore.

The carpet area for the houses to be eligible for the scheme will likely be much higher than under the new scheme compared with the existing Credit Linked Subsidy Scheme (CLSS) for the urban poor under the Pradhan Mantri Awas Yojana-Urban (PMAY-U).

Under CLSS scheme of PMAY-U, the Centre gives an interest subsidy of 6.5% for home loans up to Rs 6,00,000 for the economically weaker sections (carpet area 30-60 sqm), 4% and 3% on loan amount of Rs 6,00,000-12,00,000 and Rs 12,00,000-18,00,000 to beneficiaries belonging to MIG-I (160 sqm) and MIG-II (200 sqm) categories respectively for acquisition/constructions of houses (including re-purchase). As of date, 11.89 million houses have been sanctioned under PMAY-U after the scheme was rolled out in June 2015 and the Centre has released Rs 1.47 trillion for the scheme.

The new scheme will likely replace the CLSS scheme under the PMAY-U and give a boost the labour-intensive construction sector.

The actual expenditure on subsidy under the new scheme in the current financial year would depend on the offtake by home buyers.

However, the extra out under the scheme would not impact the FY24 budget as the government has headroom to accommodate such expenditure to some extent under its Rs 10 trillion capex programme.

Besides some savings expected from the Centre’s Rs 1.3 trillion capex loan facility for states in FY24 due to some states not fully meeting the conditionalities, there could be savings under the centrally sponsored schemes as well.

Source : Financial Express