The government today launched its 'Housing for All by 2022' mission and approved a substantial increase in interest relief on loan for the urban poor to promote affordable homes.

The Union cabinet chaired by Prime Minister Narendra Modi accepted the recommendations of an inter-ministerial committee to increase interest subvention to 6.50 per cent on housing loans to beneficiaries belonging to economic weaker section including slum- dwellers and low income groups.

The cabinet's decision benefits urban poor by an amount of Rs 2.30 lakh each and as a result this the monthly EMI would come down to Rs 2,852 per month. According to a senior housing and urban poverty department alleviation official, at present, with the interest rate of 10.50 per cent, current EMI on admissible loan component of Rs 6 lakh, over 15-year loan duration works out to be Rs 6,632 per month.

With the cabinet deciding on credit-linked subsidy to 6.50 per cent, EMI comes down to Rs 4,050 per month, benefiting the urban poor by Rs 2,582 per month, he said. On the whole, central assistance in the range of Rs 1 lakh to Rs 2.30 lakh per beneficiary would be provided under different components of the national urban housing mission in urban areas to build 2 crore new houses to meet the housing shortage, over the next seven years.