Reddy seeks cheaper housing loans

In order to revive demand in the real estate sector, Urban Development Minister Jaipal Reddy favoured cheaper loans for buying houses.

"Real estate is facing a slowdown. So we should make an arrangement for giving loans at 6.5 per cent interest for houses in the below Rs 5 lakh (Rs 500,000) category to the poor," he said after his meeting with Finance Minister Pranab Mukherjee in New Delhi on Tuesday.

"It was a pre-budget meeting and we discussed budgetary issues with the finance minister," he told reporters.

Reddy suggested an extension of housing loan at the rate of 7.5 per cent presently available for flats up to Rs 20 lakh (Rs 2 million) to those priced at Rs 30 lakh (Rs 3 million) in the cities.

"The revival of real estate is key for generating employment. The existing 7.5 per cent interest scheme should also be extended beyond June to motivate more buyers," he said.

Reddy sought more budgetary allocations for Commonwealth Games projects, DMRC extension and JNNURM projects.

"Keeping the ongoing Games projects in mind, we have sought more budgetary provisions," he said. He added that more funds for the Delhi Metro extension programmes were also sought.

"Our JNNURM programme is most successful and now more and more states are seeking projects under the scheme. So we have asked for more budgetary allocations for it," he said.