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Homebuyers association Forum For People's Collective Efforts (FPCE) has urged the government to introduce an interest subsidy on home loans for buyers of affordable and mid-income housing in the upcoming Union Budget. The body argued that the real estate market has increasingly tilted towards luxury housing, leaving middle-class and first-time buyers with limited viable options. FPCE has proposed a buyer-centric subsidy framework, under which benefits would flow directly to eligible homebuyers rather than developers, and only if EMIs are serviced on time and promoters do not default. The association has also called for clear, uniform definitions of affordable and mid-segment housing, including price caps per sq ft, and incentives to promote housing development in semi-urban areas to reduce pressure on major cities.
The Forum For People's Collective Efforts (FPCE), a representative body of homebuyers, has called on the government to introduce an interest subsidy on home loans for purchasers of affordable and mid-income housing in the forthcoming Union Budget. The association said such a measure is necessary to address the growing imbalance in the residential real estate market, where supply has increasingly shifted towards luxury housing. Advertisement
In a statement issued on Wednesday, FPCE President Abhay Upadhyay said policy focus must return to affordable and mid-segment housing, which caters to the bulk of genuine end-user demand. He observed that the dominance of high-end residential launches has widened the gap for middle-income households and first-time buyers, many of whom are struggling with rising property prices and borrowing costs.
To correct this imbalance, FPCE has demanded the introduction of a subsidised interest scheme on home loans for allottees purchasing homes in affordable and mid-segment projects. According to the association, the subsidy should be conditional, applicable only when buyers service their EMIs on time and there is no default or violation on the part of the promoter. This, FPCE argued, would ensure financial discipline on both sides while safeguarding public funds.
The association has also stressed the need for transparency and uniformity in policy implementation. It has urged the government to issue clear guidelines defining what qualifies as affordable and mid-segment housing. These guidelines, FPCE said, should specify maximum permissible rates per sq ft of carpet area to avoid ambiguity and prevent misuse of incentives.
FPCE further suggested that the policy framework should encourage housing development in semi-urban and peripheral areas. Such an approach, it argued, would help decongest major cities and towns, while simultaneously expanding housing supply in emerging growth centres where land and construction costs are relatively lower.
A key demand put forth by the association was that any incentive mechanism should be buyer-centric rather than promoter-centric. Upadhyay said subsidies or benefits should flow directly to homebuyers, who shoulder the long-term financial burden of housing through EMIs and interest payments, instead of being routed through developers.
According to FPCE, a targeted interest subsidy would stimulate genuine end-user demand and nudge developers to launch more projects aligned with the needs of the middle class. The association believes such measures could help restore balance to the housing market, which has seen limited new supply in the affordable and mid-income segments in recent years.
In addition to housing-related measures, FPCE has also sought a reduction in the tax burden on Resident Welfare Associations, arguing that RWAs perform essential civic functions and should be provided relief to manage rising operational costs.
Source - PTI
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