Govt Likely To Raise Allocations For Rural Housing – Business Standard – 21-Nov-2014

November 21, 2014 - Uncategorized

With the National Democratic Alliance government aiming to provide to all by India’s 75th Independence Day (2022), the rural development ministry is keen to increase the a-unit assistance for construction of houses to at least Rs 2,00,000 in plains and a slightly higher sum in hilly and difficult areas.

If approved, this will be more than the increase proposed in a discussion paper on the National Gramin Awas Mission, floated by the ministry a few months ago.

Officials in the know said Birender Singh, the new Union rural development minister, had raised the issue of increasing the allocation to Rs 2,00,000 a unit at his first review meeting with officials after taking charge. “The minister was of the opinion that the cost of bricks and sand, both vital for construction, has gone up manifold in all parts of the country. Therefore, lower allocation is inadequate,” said a senior official who attended the meeting.

He also said officials in the department of rural development were considering the allocation be increased from suggested in the discussion paper. It is expected a meeting between officials of the rural development ministry and housing and urban development corporation will be held soon to arrive at an a-unit allocation for constructing houses in rural areas.

  • A-unit allocation proposed to be raised from Rs 70,000 to Rs 2,00,000 in plains
  • A discussion paper on the issue had proposed raising the allocation to Rs 1,50,000
  • For building two million houses at Rs 150,000 a unit, Rs 21,840 crore will be required in 2014-15
  • The houses will be constructed under the recently conceptualised National Gramin Awas Mission

The discussion paper had proposed increasing the a-unit allocation for construction of houses in rural areas to Rs 1,50,000 in plains and a slightly higher amount in hilly and difficult areas. Under the Indira Awas Yojana (IAY), the grant for constructing a housing unit is Rs 70,000 in plain areas and Rs 75,000 in hilly and difficult areas. The IAY is expected to be subsumed in the new National Gramin Awas Mission. Officials said the minister felt instead of concentrating on meeting the target of building pucca houses alone, building durable houses should also be focused on.

The discussion paper, the basis of the National Gramin Awas Mission, had said assuming the a-unit cost of a single house was increased from Rs 70,000 to Rs 1,50,000, Rs 21,840 crore would be required to build two million new houses this financial year.

This would be Rs 6,940 crore more than the 2014-15 Budget estimate of Rs 16,000 crore. Construction of 2.5 million houses would require Rs 27,300 crore, Rs 13,200 crore more than the 2014-15 Budget estimates.


Business Standard

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