Question

“The Credit Linked Subsidy Scheme (CLSS) is a key component of the Pradhan Mantri Awas Yojana (PMAY), aimed at providing affordable housing for the Economically Weaker Sections (EWS), Lower-income Groups (LIG), and Middle-income Groups (MIG) in India.”

Identify and explain the government budget objective highlighted in the above statement.

Hint:

A housing subsidy for EWS, LIG and MIG families is a use of the budget to reduce income inequality. This is the Redistribution Function.

Answer 1

Step 1: Understand the statement:
The Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana gives a subsidy on home loans.
It helps the Economically Weaker Sections (EWS), Lower-income Groups (LIG) and Middle-income Groups (MIG) buy affordable housing.

Step 2: Identify the budget objective:
The government budget has three main objectives: allocation, redistribution and stabilisation.
Here the government gives a subsidy to poorer and middle groups. So the objective is the Redistribution Function.

Step 3: Explain the objective:
The government wants to reduce inequalities of income and wealth in society.
It does so through taxes, which are collected more from the rich, and public expenditure such as subsidies, which go to weaker groups.
CLSS is such a subsidy. It lowers the financial burden of buying a house for EWS, LIG and MIG families.
This promotes a fairer distribution of income and narrows the gap between the rich and the poor.

Final Answer:
The objective highlighted is the Redistribution Function of the government budget.
CLSS is a subsidy for weaker and middle-income groups, so it reduces inequality and brings equitable distribution of income.