Connect with us

Business

Carpet area raised to make affordable housing more accessible

The increased construction activity in housing sector has a cascading effect on core sectors like cement, steel, machinery and other allied sectors. More construction activity in the urban areas would result in creation of more jobs for both skilled and unskilled workers.

Published

on

Carpet area raised

New Delhi, June 12 (IANS) In a major boost to affordable housing, the government on Tuesday said it has raised the carpet area of houses eligible for subsidy under Credit Linked Subsidy Scheme (CLSS) by 33 per cent for the Middle-Income Group (MIG) segment.

“These enhancements will now enable more MIG customers to qualify for subsidy and avail the benefits provided under the ambitious flagship mission of Pradhan Mantri Awas Yojana (Urban),” the Ministry of Housing and Urban Affairs said in a statement.

The carpet area has been raised from “up to 120 square metre” to “up to 160 square metre” for MIG I, which comprise families with household income between Rs 6 lakh and Rs 12 lakh. For MIG II families, with annual income between Rs 12 lakh and Rs 18 lakh, it has been raised from “up to 150 square metre” to “up to 200 square metre”.

For MIG I, the interest subsidy is four per cent, eligible housing loan amount is Rs 9 lakh and the upfront amount for subsidy is Rs 2,35,068. For MIG II, the interest subsidy is three per cent, eligible loan amount is Rs 12 lakh and the upfront amount for subsidy is Rs 2,30,156.

“This augurs well with the Reserve Bank of India (RBI) policy to revise the housing loan limits for Priority Sector lending (PSL) eligibility,” it said.

The RBI has decided to revise the housing loan limits for PSL eligibility from existing Rs 28 lakh to Rs 35 lakh in metropolitan centres, and from Rs 20 lakh to Rs 25 lakh in other centres, provided the overall cost of the dwelling unit in metro and at other centres does not exceed Rs 45 lakh and Rs 30 lakh, respectively.

The MIG segment is an aspirational class which is upwardly mobile and the intent of the CLSS for MIG is to support the dream of every family of owning a house, the ministry said. The decision to increase the carpet area was done after inputs from various stakeholders.

One key issue was denial of CLSS benefit to potential beneficiaries as they were buying flats or constructing houses, where the carpet area exceeded the cap of either 120 square metre or 150 square metre, thus rendering them ineligible for the interest subsidy under MIG.

“The increased construction activity in housing sector has a cascading effect on core sectors like cement, steel, machinery and other allied sectors. More construction activity in the urban areas would result in creation of more jobs for both skilled and unskilled workers,” it said.

The CLSS for MIG scheme has gained momentum in the last couple of quarters and the offtake has picked up significantly. As on June 11, 2018, an amount of Rs 736.79 crore has been disbursed to 35,204 beneficiaries belonging to the MIG category, said the ministry.

The number of CLSS beneficiaries for Economically Weaker Sections (EWS) and Low-Income Group (LIG) is 133,213 and subsidy released for this segment is Rs 2,890.50 crore.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Global cues lift equity indices; Sensex ends over 200 points higher

Published

on

Sensex

Mumbai, June 20: Broadly positive global cues lifted the key Indian equity indices on Wednesday, with the barometer Sensex of the BSE closing with gains of more than 200 points.

According to analysts, banking, metal and auto stocks witnessed healthy buying activity.

At 3.30 p.m., the wider Nifty50 of the National Stock Exchange (NSE) provisionally closed at 10,772.05 points, up 61.60 points or 0.58 per cent from the previous close of 10,710.45 points.

Similarly, the Bombay Stock Exchange (BSE) Sensex, which had opened at 35,329.61 points, closed at 35,547.33 points (3.30 p.m.) — up 260.59 points or 0.74 per cent — from its previous session’s close of 35,286.74 points.

The Sensex touched a high of 35,571.37 points and a low of 35,329.51 points.

The top gainers on the Sensex were Reliance Industries, IndusInd Bank, Vedanta, Tata Steel and Yes Bank whereas ONGC, Coal India, ITC, Wipro and Larsen and Toubro (L&T) were the major losers.

On the NSE, Reliance Industries, IndusInd Bank and Tata Steel were the highest gainers while UPL, Hindustan Petroleum and Indian Oil Corp lost the most.

IANS

Continue Reading

Analysis

A view through an infrastructure investor’s prism

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

Published

on

investment returns

Perspectives on infrastructure assets vary widely: While investors focus on investment returns, policymakers analyse both financial and socio-economic benefits. It would be worthwhile for policymakers to view things through an investor’s investment prism because an understanding of the critical factors that shape investment decisions will help frame better policies to expedite Indian infrastructure creation.

The “raw value” of an infrastructure project is what a potential investor evaluates first. For example, in a renewable energy wind project, the wind potential of a site is what an investor evaluates. For a transportation project, the investor evaluates the potential passenger traffic. This so-called “raw value” is a huge determinant of the financial viability of a project.

Segregating infrastructure sectors and projects by such “raw value” can help government and industry alike to work towards directing infrastructure capital more optimally. Additionally, such analysis helps in framing policies for those sectors that deliver very substantial social and economic value but are not financially viable on their own.

A robust framework that helps determine “raw value” can aid all the stakeholders, especially the government, to work with investors and multilateral trade agencies to find financing solutions for such socially and economically relevant projects. Eventually, India needs to create an information repository of sorts that provides the global investor base information and access by asset type and investment potential.

Once the “raw value” of a project is determined, an investor tries to gauge what is called its “scarcity value”. Take, for instance, transportation projects. If the transportation potential of connecting City “A” with City “B” is attractive, then is building an airport to connect the two cities the most optimal infrastructure asset? That is, in spite of the traffic potential, is an airport a “scarce” enough asset to deliver attractive returns?

The investor will gauge whether the airport is likely to face competition from a competing train network or a highway. Being cognizant of the long-dated nature of infrastructure assets is important. Hence investors will have to gauge the “scarcity value” of the asset to determine the attractiveness of the asset over the long investment horizon and, therefore, eventually decide on their willingness to invest in the asset.

It is essential for the government to find a balance between allowing investors to make returns commensurate with the risk taken and allowing the public to have access to a well-priced and high-quality infrastructure asset. The twin objectives of consistency and transparency in policy are crucial in this regard.

The government’s ability to formulate and communicate the strategy effectively regarding not just sectors but individual assets is vital. To indeed expedite infrastructure creation, granular policy across industries will be needed, more so for much-needed greenfield infrastructure projects.

Apart from “raw value” and “scarcity value”, an investor considers a third factor: The quality of the underlying contracts signed for the asset. Investors look for high-quality counter-parties with whom to sign contracts. More importantly, the government’s ability to deliver a robust legal system for contract-enforcement, as also a more efficient system for conflict-resolution, will attract more significant investments.

Lowering the risk perception for Indian infrastructure assets is essential not merely to attract more investments but also to attract investments at lower financing costs. Reducing the cost of capital is going to be a significant driver of infrastructure projects through their improved financial viability.

Another area that merits attention is the possibility of the government working even more closely with Export Credit Agencies of various countries to offer foreign exchange hedges, while “importing infrastructure investments”. Solutions that not only reduce the legal risk in investments but also partially eliminate the foreign exchange risk can help boost investments significantly.

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

Policy frameworks can potentially be refined using these three key factors that shape investment decisions. Most importantly, one does not need to improve concurrently on all three fronts for all infrastructure sectors; incremental improvement on one element can provide a significant fillip to infrastructure investments.

(Taponeel Mukherjee heads Development Tracks, an infrastructure advisory firm. Views expressed are personal. He can contacted at [email protected] or @Taponeel on Twitter)

Continue Reading

Business

General Electric dropped from Dow after over 100 years

Published

on

Dow Jones stock index

New York, June 20 (IANS) General Electric (G.E.), the last original member of the Dow Jones Industrial Average, was dropped from the blue-chip index for the first time in 110 years and replaced by the Walgreens Boots Alliance drugstore chain.

The Tuesday night decision was a fresh blow to General Electric, the iconic maker of light bulbs and jet engines, which has stumbled badly in recent years, reports The New York Times.

Last year, John L. Flannery, the company’s new chief executive, warned that the power-generation unit was reeling.

G.E. cut its dividend for only the second time since the Great Depression.

In January, G.E. surprised investors by taking a big charge and setting aside $15 billion over seven years to pay for obligations held by GE Capital, the company’s financial services unit, mainly on long-term care insurance policies.

Over the last year, G.E.’s shares have fallen 55 per cent, compared with a 15 per cent gain for the Dow.

G.E., which closed on Tuesday at $12.95, has the lowest share price of any of the index’s 30 components.

S.&P. Dow Jones Indices – which owns the Dow – suggested that the slide in G.E.’s stock price contributed to the decision to remove the company from the index, where it had been a member continuously since November 7, 1907.

The Dow is a price-weighted index, which means higher priced stocks have a greater influence on its direction.

“The low price of G.E. shares means the company has a weight in the index of less than one-half of one percentage point,” The New York Times quoted David Blitzer, chairman of the index committee at S.&P. Dow Jones Indices, as saying.

“Walgreens Boots Alliance’s share price is higher, and it will contribute more meaningfully to the index.”

The move also is freighted with economic symbolism, according to Blitzer.

With the inclusion of Walgreens Boots, the index “will be more representative of the consumer and health care sectors of the US economy”, he added.

Following G.E.’s departure from the index, the company with the longest presence in the Dow will be Exxon Mobil, whose corporate predecessor, Standard Oil of New Jersey, joined the Dow in 1928, according to S.&P. Dow Jones Indices.

Alphabet, Amazon, Apple, Facebook and Microsoft are the five most valuable companies in the US today.

Continue Reading
Advertisement

Most Popular