Budget Speech - PART A
- A constraint on adding to the housing stock of the country is the Urban Land (Ceiling and Regulation) Act, 1976. It is the intention of the government to move a Bill for amending the Act in this session of Parliament.
- Indira Awas Yojana was launched to build houses for the poor in rural areas. Housing finance companies provide credit, but the bulk of such credit flows into the urban and semi-urban areas. There are some rural housing credit programmes but they lend meagre amounts upto Rs.10,000. There is virtually no source of credit for the farmer who wishes to build a modest house on his freehold land or to improve or add to his old dwelling. This gap must be filled. In consultation with the National Housing Bank (NHB) and others, I have worked out a plan. Loans, upto Rs.2 lakhs, will be given for building houses on freehold land in rural areas at normal rates of interest, subject to the borrower putting in one-third of the value of the house. NHB has been requested to prepare a scheme in which other organisations will also participate. The Prime Minister will launch the scheme on August 15, 1997 and it is our goal to sanction 50,000 loans in the first year.
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