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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.

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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.

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Fiscal slippage remains a risk for rate cut: Report

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India economy

New Delhi, Jan 17 While concerns of liquidity, coupled with declining inflation, may have prompted the industry to expect a rate cut in RBI’s Monetary Policy Committee (MPC) meeting from February 7, fears of fiscal slippage may turn out to be a spoiler, a report said.

“There is a high likelihood of a change in RBI stance from ‘calibrated tightening’ to ‘neutral’ with a possible rate cut in the next MPC meeting. Fiscal slippage, however, continues to be a risk for rate cut,” JM Financial said in its report on Thursday.

Though the government maintains confidence in meeting the 3.3 per cent fiscal deficit target for this fiscal, the deficit in the first eight months till November stands at Rs 7.17 lakh crore, or 114.8 per cent of the Rs 6.24 lakh crore full year’s target.

Ahead of the RBI’s monetary policy review, India Inc on Thursday urged the Reserve Bank of India (RBI) to cut its interest rate and the cash reserve ratio (CRR) to infuse liquidity in the economy and boost growth.

In a meeting with RBI Governor Shaktikanta Das, who will preside over his first MPC meeting on February 7, leading industry chambers also suggested various measures to ease the ongoing liquidity crunch and reduce the high cost of credit.

JM Financial has predicted that CPI inflation over the next three months to inch up from the current levels, but will remain in the range of RBI’s forecast, which is 2.7 per cent to 3.2 per cent.

The double digit food inflation during 2008-14 was tamed to mid-single digits over the last four years owing to easing agri-imports in a declining global agri-commodity price environment and steady yield improvements, it said.

The report, however, mentioned that in the last three months, food inflation has turned negative and that its study indicates a build-up of excess supply in several food categories (pulses, fruits and vegetables, sugar, milk etc.) exerting price pressure.

“Liquidity challenges have also adversely impacted economic activity, as per our channel checks,” it added.

The report also takes note of liquidity challenges in the rural economy saying the low food inflation does have calming impact on the overall inflation, but a sustained low inflation regime can also lead to adverse impact on rural income and can be a cause of social unrest, it warns.

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Sensex ends 52 points up, Nifty holds 10,900

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Sensex Nifty Equity

Mumbai, Jan 17: Amid mixed global markets and the ongoing corporate earning session, Indian equities ended higher on Thursday. Ahead of the release of quarterly results by index heavyweights, the Sensex closed with a 52 point gain while the Nifty ended above 10,900.

According to market participants, investors were cautious ahead of the third quarter results by Reliance Industries and Hindustan Unilever, to be announced later in the day.

The S&P BSE Sensex closed 52.79 points of 0.15 per cent higher after it shuttled between a high of 36,468.42 and a low of 36,170.80.

It opened close to 100 points up at 36,413.60 from its previous close of 36,321.29.

The broader Nifty ended in the green, up 14.90 points and 0.14 per cent.

Oil and gas and finance scrips led the gains on the Sensex. The index pivotal, banking stocks erased early losses to end flat while the healthcare stocks declined 0.90 per cent.

Stock-wise, Axis Bank, HCL, HDFC, TCS and Kotak Mahindra gained in the range of 1 to 2 per cent.

In contrast, Sun Pharma lost over 5 per cent followed by Yes Bank which declined over 3 per cent.

State Bank of India, Bajaj Finance, Hindustan Unileiver declined between 1 to 2 per cent.

Globally, markets traded on a mixed note amid political uncertainty in the UK over Brexit and the longest-ever partial shutdown of the US government.

However, British Prime Minister Theresa May won a confidence vote in the House of Commons on Wednesday, averting any immediate risk of an early general election.

IANS

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RBI relaxes external commercial borrowing norms

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Reserve Bank of India

New Delhi, Jan 16 : The Reserve Bank of India (RBI) on Wednesday announced a new framework for external commercial borrowings (ECBs) and rupee-denominated bonds in a bid to improve ease of doing business.

As per the new framework, all eligible borrowers can now raise external commercial borrowings up to $750 million or equivalent per financial year under the automatic route, replacing the existing sector-wise limits.

It also set the minimum average maturity period at three years for all external commercial borrowings irrespective of the amount.

Previously, the RBI had only allowed companies to borrow up to $50 million for three years. For funds beyond $50 million, companies had to borrow for at least five years.

“Tracks I and II under the existing framework are merged as ‘Foreign Currency-denominated ECB’ and Track III and Rupee-denominated Bonds framework are combined as ‘Rupee Denominated ECB’ to replace the current four-tiered structure,” the RBI said in a statement.

It also expanded the list of eligible borrowers allowing all entities eligible to receive foreign direct investment to borrow under the ECB framework.

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