Bangalore: Keeping an eye on the votes of below poverty line families in the coming Lok Sabha elections, the Housing Department proposes to waive the principal amount and rate of interest component on housing loans taken by beneficiaries of the Ashraya scheme.

The loan waiver scheme is likely to be announced in the State Budget for 2014-15 to be tabled in the Legislative Assembly on Friday by Chief Minister Siddaramaiah.

Officials in the Housing Ministry told The Hindu on Wednesday that about 16 lakh beneficiaries have taken loans of up to Rs. 10,000 from boards and corporations for the construction of houses under the Ashraya scheme and they have not paid the principal amount for the last two decades.

The entire principal amount adds up to Rs. 700 crore, while the interest amount would be around Rs. 1,085 crore. Minister for Housing M.H. Ambareesh has suggested to the Chief Minister to write off both principal and interest amount, officials said.

The former Housing Minister V. Somanna had formulated guidelines for interest waiver on loans if families paid the principal amount for construction of houses. But the government was able to recover only Rs. 40 crore.

Gold medal Officials said the department has constructed 2.4 lakh houses under various schemes and allotted them to the beneficiaries in 2013-14.

The department has secured a gold medal from the UPA government for allotting houses through GPS mobile-based housing amount and fund transferable system.

The total subsidy for each house is Rs. 1.2 lakh and the department provides beneficiary-bank linkages for obtaining loans from nationalised banks.
Affordable housing

The department has also proposed to implement affordable housing policy for economically weaker sections and lower income groups. Mr. Ambareesh has chaired a meeting with developers and office-bearers of the Confederation of Real Estate Developers’ Association of India (CREDAI) towards this.

The cost of each house under the scheme would be Rs. 2.8 lakh.

Under the policy, the government will provide building plan approvals in a transparent manner and offer various concessional facilities in the form of taxes and registration. The developer has to allot about 30 to 40 per cent of houses to EWS or low-income families, officials said.