While Finance Minister Arun Jaitley had allocated a sum of Rs 8,000cr for rural housing scheme and Rs 4,000cr for urban housing scheme in his Budget announcement on July 10, 2014, the take-off has been very slow.
As on July 6, 2015, the disbursement from the rural housing fund amounted to only Rs 2,364 crore or 29 per cent of the fund allocation and that for the urban housing fund was slightly better at Rs 2,573 crore or 64.3 per cent of the fund allocation.
While National Housing Bank anchors the scheme, the interest rate at which these loans are provided to lending institutions — HFC’s RRB’s and banks stood at 6.87 per cent. In turn the loans are made available to individuals at 8.87 per cent by HFC’s and RRB’s and at the base rate by the scheduled commercial banks.
The finance minister had increased the allocation for the year in a bid to support rural housing and low cost affordable housing in urban areas in 2014-15.