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Tata Capital > Blog > Impact of Article 370 on the Home Loan Industry

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Impact of Article 370 on the Home Loan Industry

Impact of Article 370 on the Home Loan Industry

August 5, 2019, will go down in history as the day that Kashmir was reborn. The abrogation of Article 370 repealed Jammu and Kashmir’s special status and restored its statehood in the Indian government by splitting the state into two Union Territories.

This radical moment has filled the citizens of Kashmir with hope since this strategic move has opened up Jammu and Kashmir to new and exciting business opportunities. With the Centre regaining power, Kashmir could soon turn into a hotspot for investment opportunities and bring about major economic reforms.

The real estate sector is one such industry which has been heavily impacted by Article 370. But before we talk about the impact of Article 370 in real estate and home loans, we must know how the Article 370 caused this shift in the first place.

What is Article 370?

Article 370 was drafted in the Indian constitution in late 1949 by Jawaharlal Nehru and Sheikh Abdullah. Based on this vision, Kashmir would hold a special status and function as an independent entity in India. Article 35A which stemmed from Article 370 also had similar provisions and both could be revoked through a Presidential Order and the passage of Resolution in the Parliament.

Provisions of Article 370

  1. The state of Jammu and Kashmir had a separate constitution, laws and National Flag except for matters related to finance, foreign affairs, defence and communications.
  2. The Kashmiri citizens had different laws regarding their citizenship, property ownership and fundamental rights.
  3. Under this provision, the state prohibits outsiders to buy, own or sell property rights in Kashmir.

Provisions of Article 35A

  1. This article only allows permanent residents to buy or own property in Kashmir and further denies jobs and scholarships to outsiders.
  2. Kashmiri women who married out of the state lose their property rights and have no dignity.
  3. The children od these women would bear the same consequences.

Impact in Home Loan Industry

The inability of outsiders to own property had hindered the scope for growth in real estate. Due to Article 370, no business conglomerates tried to invest in new hotel chains in Kashmir. Even the premium localities did not see a rise in price for decades. Due to all these intermingling factors, the economy of Kashmir started tumbling down at a rapid pace.

Ever since the abolishment of Article 370, the local investors have been in talks with major developers to invest in scenic surroundings and lucrative markets. It has also garnered the attention of mid-level buyers who are looking for real estate opportunities. These lucrative buyers are estimating a bright future for Kashmir’s real estate market and are thus, taking out housing loans which has heavily impacted the home loan industry.

Looking for real estate investment opportunities but don’t have adequate resources? Connect with Tata capital to choose from a wide range of housing finance deals. We offer attractive home loan interest rates, high home loan eligibility and flexible EMI options to help you invest in the right property.

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