The Ministry of Housing & Urban Poverty Alleviation during the Economic Editors’ Conference

The Government of India has recognized that housing is a very important source of employment; has a large multiplier effect on the economy and demand in about 20 manufacturing sectors; and there is a large unmet need for housing in the country, especially for middle and low income groups. Housing finds a prominent place in the sectors with potential for employment and investment opportunities. The sector has therefore, figured in the various stimulus packages announced by the Government.
In the current financial year, the Government maintaining that lower and middle income housing deserves to be supported to stimulate this segment of house owners, has announced one per cent interest subsidy to individuals for loans up to Rs 10 lakhs for houses that do not cost more than Rs 20 lakhs. The interest subsidy will be routed through the scheduled commercial banks and the housing finance companies registered with the National Housing Bank. This interest subsidy will be available for a period of one year. A subsidy of Rs 1,000 crore will be provided this purpose. In order to provide a further stimulus to the housing sector by providing tax relief, it has been decided to amend Section 80 IB (10) of the Income Tax Act so as to allow the tax holiday in respect of profits derived from projects approved between the 1st April 2007 to 31st March, 2008; if such projects are completed on or before 31st March, 2012.
In follow-up of various packages and its own objectives of tackling the housing shortage, the Ministry has launched two new schemes and is in the process of launching another scheme by the name of Rajiv Avas Yojana (RAY).

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