Now annual income up to 1 lakh will be EWS and those between 1 lakh and 2 lakh LIG

In a far-reaching decision that would impact a large number of Economically Weaker Section and Lower Income Group households in Delhi and curb to a great deal the practice of making false income certificates, Union Minister of Housing and Poverty Alleviation Ajay Maken has effected an upward revision in the income criteria for these categories.

New Delhi The special extra-commercial borrowings (ECB) window for low-cost housing projects will be subject to a cap of $1 billion to start with. The detailed norms for ECB access to this segment, which is facing a funds crunch, are likely to be announced soon, say government sources.

In August, the government had allowed designated housing finance companies and the National Housing Bank (NHB) to access overseas loans for the specific purpose of financing low-cost housing. ECB would be permitted in housing projects where 60% of the total area is devoted to low-cost houses having a carpet area of 60 sq metres, sources said.

Mumbai In a move that could give a further fillip to the economic reforms kickstarted by the Centre last week, the government has now told commercial banks to fund partially completed residential projects, as well as projects in small towns on a priority basis.

At a meeting between the secretary for financial services, DK Mittal, Indian Bankers Association (IBA) and developers’ apex body Confederation of Real Estate Developers’ Associations of India (Credai) in Mumbai, Mittal asked commercial banks to focus on funding under construction projects that are delayed due to want of funds, said Credai president Lalit Kumar Jain.

In a strong bid to promote energy conservation in the residential sector, German KfW Development Bank is providing a loan of euro 50 million to National Housing Bank (NHB) for refinancing housing loans to buy energy efficient housing units.

KfW has pushed a similar scheme in Germany, where it provided loans to the tune of euro 40 billion for 1.8 billion “green” housing units. This helped substantively bring energy consumption down in the residential sector in Germany. India currently has 246.7 million households but the focus of the NHB is to target households that want to purchase flats in `50-70 lakhs bracket.

New Delhi In a bid to spur real estate players to build homes for the low-income population, the proposal to allow them to access end-use linked external commercial borrowings (ECBs) for low-cost housing will soon be implemented. According to a senior government official, “the Reserve Bank of India (RBI) is going to notify the scheme in a few days”.

The scheme would impose stiff end-use norms to ensure that overseas funds are not used by developers for other purposes. ECBs are much cheaper than local debt due to near zero interest rates in many developed countries. But the actual interest rate would depend upon the lenders’ assessment of the borrowers, economic viability of projects, expected returns and the credit rating of the borrower.

The Housing and Urban Development Corporation Limited (HUDCO) wants to focus on housing for the economically weaker sections. On Tuesday, its Chairman and Managing Director V. P. Baligar said the organisation has upped its performance in the social housing sector, and is keen to do more.

“We are in discussions with the government of Rajasthan for a special scheme of housing for the urban poor. We will extend support to the Rajasthan government.

Escrow account, routing of fund through specified agencies under consideration, real estate bodies want clarity in definition

The finance ministry is building safeguards to ensure realty companies do not misuse the external commercial borrowing (ECB) window announced in the Budget by diverting the money. A senior official told Business Standard modalities were being worked out for implementation of the Budget announcements. These were likely to specify the projects and also the developers who would be allowed to utilise the ECB facility.

External lenders may not find low-income or affordable housing attractive, due to the low profit margins and high risk

A proposal has been mooted for all external commercial borrowing (ECB) for affordable housing to be routed through the National Housing Bank (NHB), mooted by the latter. Many in the real estate sector are sceptical about the practicality of the Budget proposal on ECB for this segment.

The National Housing Bank (NHB) will set up a loan guarantee fund of Rs 1,200 crore for the urban poor.