Home loans of up to Rs 15 lakh may get 1% interest subsidy

To give a boost to the housing sector, the government may increase tomorrow the home loan cap for availing 1% interest subsidy to Rs 15 lakh from existing Rs 10 lakh.

The government may also raise the ceiling on cost of house to Rs 25 lakh from Rs 20 lakh to avail this benefit.

The Union Cabinet in its meeting tomorrow may take decision on the matter, sources said.

Under a scheme introduced in 2009, home loan borrowers now get 1% interest subsidy on bank loans of up to Rs 10 lakh, provided the cost of the house does not exceed Rs 20 lakh.

Finance Minister Pranab Mukherjee in his Budget Speech this year had announced liberalisation of the existing scheme of 1% interest subvention on housing loans of up to Rs 15 lakh, where housing cost is not exceeding Rs 25 lakh.

"To further stimulate the growth in housing sector, I am liberalising the existing scheme of interest subvention on 1% on housing loans by extending housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, from the present limit of Rs 10 lakh and 20 lakh respectively," Mukherjee had said.

The Cabinet is also likely to approve increase in India's contribution to International Monetary Fund (IMF), that would provide higher voting rights to the country.

The increase in contribution is part of ongoing quota reforms aimed at providing greater say to the emerging economies.

Source: Business Standard