TNI Bureau: The government on Wednesday extended the 1 per cent interest subsidy scheme on housing loans of up to Rs 15 lakh by one year reviewing the weak economy and falling of rupee against dollar in past weeks.

With the announcement of extension of the scheme, the limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh, and Rs 9,925 for a loan of Rs 10 lakh.

The extended scheme will benefit the people, who had taken the housing loans from the banks. The proposal was given a nod by the Cabinet chaired by Prime Minister Manmohan Singh for extension of the scheme by one year.

Home Minister P Chidambaram said that when the interest rates have increased, the 1% relief is a relief for the middle class and lower middle class people. The decision was taken as a large number of people have benefited from the 1% interest subvention and “whoever borrows now will get the benefit of 1%”.

Former Finance Minister Pranab Mukherjee had made a budgetary provision of Rs 400 crore for the financial year 2012-13 for implementing the scheme. The National Housing Bank (NHB) is the nodal agency for implementing the scheme both for banks and housing finance companies.

Earlier, the interest benefit was given on loans of up to Rs 10 lakh and the cost of the house did not exceed Rs 20 lakh. The government had liberalised the scheme in the financial year 2011-12 and increased the loan limit up to Rs 15 lakh and the cost of up to Rs 25 lakh.