In a move which also seems to be aimed at giving a boost to the economy facing recession, the Union cabinet on Thursday is likely to approve a scheme to extend interest subsidy of 5% a year on the market rate of interest on housing loan for a period of five years to economically weaker sections and low income groups of society.

The housing ministry's proposal aimed at providing shelter to the poor in urban areas is likely to ensure that the EMI remains less than 20% of the monthly family income of the beneficiary.

The proposal came after the ministry's own estimates suggested that there will be a huge requirement of about 26 million houses during the 11th Plan period (2007-12) and around 98% of this shortage will be in EWS and LIG segments of society.

The Times of India