Indira Awaas Yojana Problems Bigger Than Houses

The Indira Gandhi Awaas Yojana is a social welfare programme of the Government of India aimed at providing households to the poor of the country. In fact, it is one of the major programmes implemented by the Government of India to provide housing facilities for people Below Poverty Line (BPL). The Indira Gandhi Awaas Yojana first came into existence as a sub-scheme under the Rural Landless Employment Guarantee Programme (RLEGP). Later this programme was as a sub scheme under the Jawahar Rozgar Yojana (JRY) which was launched in 1989. It was upgraded from a sub scheme and declared an independent scheme — the Indira Awaas Yojana ( IAY ) — with effect from 1 January 1996.

Objective and Target Groups
According to Government of India guidelines, “The Indira Awaas Yojana (IAY) is a flagship scheme of the Ministry of Rural Development to provide houses to the poor in the rural areas”.
The objective of the Indira Awaas Yojana is primarily “to help in the construction/upgradation of dwelling units of members
of Scheduled Castes/Scheduled Tribes, freed bonded labourers and other below the poverty line non-SC/ST rural house holds by providing them a lump sum financial assistance. The target groups for houses under the IAY are below poverty line (BPL) households living in the rural areas belonging to Scheduled Castes/Scheduled Tribes, freed bonded labourers and non-SC/ST BPL rural households, widows and next of-kin to defence personnel/paramilitary forces killed in action residing in rural areas (irrespective of their income criteria), ex-servicemen and retired members of paramilitary forces fulfilling the other conditions”.

Funding Pattern
The funding of the Indira Awaas Yojana is shared between the Centre and the States in the ratio of 75:25. In the case of Union Territories, the entire funding for the Indira Awaas Yojana is provided by the Centre to the District Rural Development Agencies (DRDAs) which release funds to the beneficiaries through Gram Panchayats.
Earmarking of Funds for SC/ST Beneficiaries
Funds available under the Scheme in a district are earmarked for various categories as under:

  •  At least 60 per cent of the total lAY allocation during a financial year should be utilised for construction/upgradation of dwelling units for SC/ST BPL households.
  •  A maximum 40 per cent for non-SC/ST BPL rural households.
  •  3 per cent of the above categories for physically and mentally challenged persons.

If any particular category is exhausted or not available in a district, allocation can be utilised for other categories as per priorities given in the Guidelines after it has been certified to this effect by the Zilla Parishad/DRDA concerned.
The financial assistance provided for new construction under the Indira Awaas Yojana is Rs.45,000 per unit for the plain areas and Rs.48,500 for the hilly or difficult areas. The assistance for upgradation of an unserviceable ‘kutccha’ house to a ‘pucca’ or semi ‘pucca’ house is Rs.15,000 for all areas. The assistance for the credit-cum-subsidy scheme is Rs.12,500 per unit. A maximum of 20 per cent of IAY allocation can be utilised for upgradation and credit-cum-subsidy scheme. Further, provision has been made to extend lower interest rates for construction of IAY houses in rural areas.


The Programme is to be implemented through the Zilla Parishads/DRDAs and houses will be constructed by the beneficiaries themselves.

Problems and Challenges
However, the programme is beset by several serious problems and challenges. The main problem centres round the proper implementation of the programme and its failure in reaching the poorest of the poor because of corruption and the design of the prgramme. The issue of land is a major hurdle. The majority of poor people do not possess their own land and live on land that belongs to others, for example, land of landlords or Government land etc. The IAY does not have any provision for providing houses to poor people who do not possess their own land. So in the absence of land distribution measures poor people with no land are left out of the programme and thus remain deprived of the benefits offered by the IAY. Corruption has also taken a toll on the proper implementation of the programme. The beneficiaries of the IAY are supposed to be selected by the Gram Panchayats but it has been found that a majority of the beneficiaries have not been selected by them. This has resulted in many amongst the poor being left out from the programme whereas people who are not in the BPL section are availing the benefits of the IAY.
Moroever, allegations have been made that out of the total amount allocated to the IAY, officers and others in various offices have appropriated funds from the programme on an individual basis. The leakage of funds has made the implementation of building households a difficult task. Naturally, in this case too, it is the poor who suffer. The problems don’t end here. There has been strong criticism that on the recommendation of powerful political leaders, IAY funds are provided to people who are not supposed to be beneficiaries. Besides, funds are often not released to the States on the scheduled dates. Contractors were barred from this programme so that the beneficiaries could take their own decisions and involve themselves in house design and construction. However, in many instances, even after starting the building of their houses, the beneficiaries could not complete the construction. This was because after the first instalment, the beneficiaries did not receive further instalments and so could not complete construction of their houses. Ironically, the Indira Awaas Yojana also has a monitoring programme but the implementation of the system obviously leaves much to be desired.


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