Finance Minister Nirmala Sitharaman today announced a Rs 70,000 crore boost to the housing and construction sectors that have been affected by the coronavirus outbreak and lockdown, by extending an interest subsidy scheme meant to help middle class families build or purchase a house.
Ms Sitharaman, unveiling the second tranche of Prime Minister Narendra Modi's Rs 20 lakh crore stimulus package for a coronavirus-hit economy, said a credit-linked subsidy scheme for middle-income groups that had been operationalised in May 2017 and expired on March 31 would be extended by 12 months to March 2021.
The move, she said, would provide the housing and construction sectors by stimulating demand for steel, cement, transportation, and other construction-related materials and activities.
"We wish to give middle income groups - referring to the lowest strata of the middle class (incomes between Rs 6 and Rs 18 lakh only) a scheme for subsidised housing. We are now offering a one-year extension of the scheme - from March 2020 to March 2021," Ms Sitharaman said.
"This had already benefitted 3.3 lakh families. The extension by 12 months will benefit another 2.5 lakh middle income families and generate a sudden demand in the housing sector," she added.
The Finance Minister's announcement is likely to bring some cheer to a construction sector that has seen all activity come to a grinding halt as a result of the coronavirus lockdown.
Under the terms of the lockdown, ordered by Prime Minister Narendra Modi in March, all non-essential economic activity had been stopped. The ban on construction activity also affected lakhs of migrant workers and daily labourers who relied on construction for jobs, money, food and shelter.
Left without any of them, and stuck after the shutdown of public transportation, tens of thousands began walking hundreds of kilometres home, triggering a massive crisis for the government.
The move to extend subsidies for purchase and construction of homes by middle income groups comes after the government earlier allowed construction activity in rural areas, as part of a strategy for a phased exit from the coronavirus lockdown.
In her speech today Ms Sitharaman also said an additional Rs 30,000 crores would be released as emergency fund for farmers hit by the coronavirus crisis.
She also said announced a Rs 5,000-crore credit facility for street vendors and referred to a "One Nation One Ration Card" scheme to help economically weaker sections get rations.