In a move indicative of the UPA government entering the poll mode, the Union cabinet on Thursday enhanced the monetary assistance under its flagship-housing scheme for the rural poor by 55%.
As per the decision, Indira Awas Yojana (IAY) beneficiaries would be provided Rs 70,000 instead of Rs 45,000 to build a house. The revision comes
in three years. The assistance was enhanced from Rs 35,000 to Rs 45,000 per unit, from April 2010.
IAY benefits about 30 lakh rural families who are Below Poverty Line. The enhanced subsidy is applicable from April 2013, a year from the 2014 polls.
The subsidy in case of the hilly states and Maoist-affected districts would be R75, 000, in place of R48, 500.
The proposal though was met with opposition from the finance ministry that is tasked with the challenge of balanced resource distribution in time of economic slowdown.
While rural ministry proposed the assistance of R75, 000 per unit, the finance ministry wanted it to be Rs 65, 000. “As a middle-path, Rs 70, 000 assistance was approved,” rural development minister Jairam Ramesh said.
The central outlay for the IAY is R11, 075 crore in 2012-13. The approved enhancement would require another R4,000 crore in the coming central budget to cater to the same number of beneficiaries in 2013-14.
Funding for the IAY is shared between the Centre and states at 75:25 ratio. The Union cabinet has also enhanced the assistance for buying homestead site to Rs 20, 000 from Rs 10, 000.
IAY beneficiaries could avail an additional Rs 9,000 for toilet construction. They are also eligible for a loan of up to Rs 20, 000 at 4% interest.