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CLSS Scheme And Its Impact on Real Estate Market in India

Credit Linked Subsidy Scheme, popularly known as CLSS Scheme, is one of the major components introduced recently under Pradhan Mantri Awas Yojna (PMAY) where the central government will provide interest subsidy to the eligible customers. The government has announced an increase in the carpet area by 33% under the PMAY subsidy scheme. This is the main reason for the boom in the real estate market in India. Under this scheme, more and more people are now buying own house and availing subsidy benefits. The rise in the sale of houses is already seen in tier II and tier III cities where the cost of land is comparatively low.
The recent changes under the CLSS scheme include:
Under the PMAY subsidy scheme, the carpet area of house eligible for interest subsidy under the CLSS scheme is different for different categories. According to the recent changes:

  • The carpet area for MIG II beneficiaries (falling in the income range of 6 Lakhs to 12 Lakhs) has increased from 120 sq. ft. to 160 sq. ft.
  • For MIG II Beneficiaries (falling in the income range of 12 to 18 Lakhs), the carpet has increased from 150 sq. ft. to 200 sq. ft.

Undoubtedly, the rise of the carpet area has made housing affordable. It has broadened homeownership opportunities for home buyers.
Advantages to MIG categories

  • For MIG I: The available home loan amount is Rs 9 Lakhs and they are eligible for a maximum subsidy of Rs 2.35 Lakhs with interest subsidy at the rate of 4% p.a.
  • The available home loan amount is Rs 12 Lakhs for the MIG II category and they are eligible for a maximum subsidy of Rs 2.30 Lakhs with interest subsidy at the rate of 3% p.a.
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