Context:
Recently, the Supreme Court has provided relief to homebuyers in the National Capital Region (NCR) under the Subvention scheme.
Relevance:
GS II: Government policies and Interventions
Recent Supreme Court Ruling on the Subvention Scheme
Relief to Homebuyers in NCR:
- Supreme Court’s Instruction: The Supreme Court has granted relief to homebuyers in the National Capital Region (NCR) by instructing banks not to take coercive action against those who have not yet received possession of their flats.
Subvention Scheme:
- Definition and Mechanism:
- Agreement: The subvention scheme involves a tripartite agreement among the buyer, banker, and developer.
- Payment Structure:
- Buyer: Pays 5-20% of the flat’s cost upfront.
- Bank: Loans the remaining amount to the developer.
- Developer: Pays the interest on the loan until the buyer takes possession.
- Buyer’s EMI: Starts after possession of the property is received.
- Purpose: The scheme is designed to boost sales for developers and defer EMI payments for buyers, making property purchases more attractive.
- Challenges Faced:
- Defaults: Many builders have defaulted on their payments under this scheme, causing issues for buyers.
Subsidy:
- Definition and Purpose:
- Financial Assistance: Subsidy refers to direct financial assistance provided by the government or other entities to reduce the cost of a product or service for the consumer.
- Impact: It results in a decrease in the price of the product or service for the consumer.
- Examples: Government subsidies are commonly applied to food grains, fertilizers, or fuel.
-Source: The Hindu
