The Modi Government has considerably brought down its fund share for construction of houses in the rural areas under the Centrally Sponsored Scheme, Indira Awas Yojana (IAY), from 75 per cent to 50 per cent. The balance 50 per cent will be borne by the States.
Even the special category hilly States such as Uttarakhand, Himachal Pradesh and Jammu & Kashmir will have to bear a 50:50 funding burden for the year 2015-16. Till now, the funding ratio has been 85:15 between the Centre and Hilly States. However, for the North-East and Union Territories, the funding pattern continues to remain at 90:10 and 100 per cent respectively.
The cut in central fund is in keeping with its budget announcement of cutting down the central fund in its 16 flagship schemes including the IAY, said a senior official from the Rural Development Ministry. The Government hopes that increased devolution of funds from 32 per cent to 42 per cent would ensure that the States will fund the scheme after the funding pattern has been changed.
The official, however, added that as a part of restructuring of IAY, which was launched by the UPA Government, the spending per house has been increased to Rs1 lakh from Rs70,000 in the plain areas and Rs75,000 in the hilly areas. The unit size has also been raised from 20 sq mts to 25 sq mts with toilet and bathing space as its integral part. The aim is to make the IAY more purposeful for the below poverty line (BPl) population in the rural areas, the official said adding that the Government has kept target of providing ‘pucca houses for all by 2022’, including those in the villages as announced in the Union Budget 2014-15.
A target of 3.20 crore houses is kept for a period of eight years with an annual target of 25 lakh houses across the States.
The Centre has allocated over Rs9,508.75 crore for construction of nearly 25 lakh houses under the IAY in 2015-16. “The financial allocation has been made as per the guideline giving 75 per cent weight to rural housing shortage from the latest Census data and 25 per cent weight to poverty estimate,” said the official.
Beneficiaries will have to contribute for the construction of the houses, for which he/she has the option to approach the financial institutions for loan. They can borrow Rs20,000 at an interest rate of 10.5 per cent. They would have to pay 4 per cent of the interest while 6.5 per cent would be met through interest subvention by the Centre,