Press Information Bureau

Government of India

Ministry of Finance

16-March-2012 14:11 IST

ECB Allowed for Low Cost Housing

Rs. 4,000 Crore Allocated for Rural Housing Fund

Indirect Finance Under Priority Sector Doubled

Presenting the General Budget 2012-13 in LokSabha here today, ShriPranab Mukherjee, Finance Minister announced various majors for mitigating shortage of housing for low income groups. The Finance Minister proposed allowing External Commercial Borrowings (ECB) for low cost affordable housing projects and setting-up of a Credit Guarantee Trust Fund to ensure improved flow of institutional credit for housing loans.

The Finance Minister, Shri Mukherjee informed that provisions under the Rural Housing Fund are proposed to be enhanced from Rs. 3000 crore to Rs. 4000 crore. He also proposed enhancement of limit of indirect finance under priority sector from Rs. 5 lakh to Rs. 10 lakh.

The Finance Minister announced extension of the scheme of interest subvention of 1 percent on housing loan up to Rs. 15 lakh where the cost of the house does not exceed Rs. 25 lakh for another year.

DSM/MV/LMP/54

External commercial borrowings allowed for low cost housing, rural housing fund raised and priority sector limits increased. Allowance of External Commercial Borrowings (ECB) for low cost affordable housing and creation of a Credit Guarantee Trust Fund are proposed to expand institutional credit flow; the Rural Housing Fund provision is to be increased and the indirect finance ceiling under the priority sector raised, with an extension of the existing interest subvention scheme for eligible housing loans.