With an eye on the Lok Sabha elections due early next year, the government is considering an over 66 per cent increase in grants to BPL families under the Indira Awaas Yojana (IAY) for rural housing from April this year. The move is aimed to offset the rise in the prices of construction material.
The Cabinet on Thursday is slated to consider the proposal to enhance government assistance for constructing rural houses for families below poverty line (BPL) from the current Rs 45,000 per unit to Rs 75,000 per unit in plain areas, and from Rs 48,500 to Rs 80,000 per unit in hilly areas.
Ministry sources said the proposal for such a huge hike aimed to offset “over 30 per cent rise in prices of cement, steel, rods, bricks and other input materials” since UPA-II came to power in 2009.
In addition, the Rural Development Ministry, which has mooted the proposal for Cabinet’s consideration, has proposed an extra Rs 9,000 assistance for creating toilet units in each of the IAY houses.
The ministry has also proposed an increase in central government assistance from Rs 10,000 to Rs 20,000 for purchasing homestead plots for landless BPL families.
Since the central government assistance under Indira Awaas Yojana was revised in 2010, the Finance Ministry was learnt to have objected to such a steep hike during the deliberations in the Expenditure Finance Committee, which vetted the proposal.
Sources said the Finance Ministry and the Planning Commission are willing to enhance the assistance to Rs 65,000 per unit to keep a check on the fiscal burden this year.
The Rural Development Ministry, however, is learnt to have proposed Rs 75,000 per unit for the Cabinet’s consideration, with a concession that it will cut down on the number of houses it plans to construct in order to meet the expenditure envisaged for the scheme during the 12th Five Year Plan.
The government had planned to construct about 30 lakh houses for BPL families across the country during the current fiscal.