The government has passed another benefit for economic revival after the union budget by announcing special concessions for the housing sector in a bid to revive demand in the segment.

Finance minister Pranab Mukherjee announced one per cent reduction for home loans besides extending tax holidays given to the industrial parks.

The FM, hoping 8-9 per cent growth rate by the end of 2010, informed Lok Sabha that commercial banks will offer 1 per cent subsidy on home loans not exceeding Rs 10 lakh.

The move is aimed to help lower and middle income families looking to buy a house. The government has already reserved Rs 1,000 crore to provide interest subsidy.

Hailing the decision, Pradeep Jain, chairman, Parsvnath Developers, said, "The demand for affordable housing is picking up and the interest subvention of 1 per cent on home loans will make it easier for people to buy homes."

Meanwhile, the industry body FICCI hailed the announcements made by the finance minister and said that it will help to propel the growth of economy, currently undergoing recovery path.