The Indian government is considering a $7.2 billion housing loan interest subsidy scheme to provide subsidised loans for small urban housing over the next five years. Under this scheme, banks will offer an annual interest subsidy of 3-6.5% on housing loans up to 0.9 million rupees, with eligibility for loans below five million rupees and a 20-year tenure.
This initiative, announced by Prime Minister Narendra Modi in August, aims to benefit low-income groups in urban areas, particularly those living in rented houses, slums, or unauthorised colonies. While the scheme is expected to roll out ahead of key state elections later this year and general elections in 2024, specific lending targets have not been provided to banks.
