What is Indira Awaas Yojana?

Food, shelter and cloth are the basic human needs and to have these is the right of every individual. The Ministry of Rural Development in India looks after the rural development and takes care of the rural needs. Indira Awaas Yojana (IAY) is one of the many programmes of the Ministry of Rural Development.  IAY deals with the housing issue and promises to provide shelter to shelterless.  It fulfills the housing need of poor rural people who are living below the poverty line (BPL).

Indira Awaas Yojana came in 1985-86 as a part of the Rural Landless Employment Guarantee Programme (RLEGP). It was launched to provide uniformity in the policy for rural housing. There were schemes even before IAY but some schemes used to provide the complete housing and others used to bear just the cost of construction. IAY continued to be a sub scheme of Jawahar Rozgar Yojana (JRY). Initially only 6% funding of JRY was allocated to Indira Awaas Yojana which was later on doubled. Both Center and State contribute to the funds for the Yojana in the ratio of 75:25. In case of Sikkim and North-Eastern states the funding is in the ratio of 90:10.

To begin with family living below poverty line used to get Rs 45,000 to construct a house in plain area and Rs 48,500 to construct house in hilly and difficult area. The financial assistance has been increased to Rs 70,000 and Rs 75,000 w.e.f. 1st April 2013. IAY beneficiaries can also avail loan of up to Rs 20,000 to construct a house at an annual interest of 4%.IAY funds can also be allocated to up grade kuccha houses.

Salient features of Indira Awaas Yojana

While allocating funds under this scheme, 75% weightage is given to the scarcity of housing and 25% to poverty ratio. SC/ST gets benefit as 60%funds are for them, physically handicapped enjoys 3% share in funds and minorities have 15% share in the total funds.

Customarily the houses under this scheme are either allotted to the women or to both husband and wife.

5% of the total fund is kept for emergency situation like natural calamity or riot etc. This fund can move from state to state.

Beneficiaries are selected by Gram Sabha either from the list of eligible living below poverty line or Permanent Indira Awaas Yojana waiting list.

House is constructed by the beneficiary without the involvement of contractors. Though there is no standard plan but the house must have a sanitary latrine and smokeless chullah. To construct toilet additional assistance of Rs 9,000 is given under IAY.


Under Indira Awaas Yojana, 25.2 million houses have been constructed since 1985. Rural housing is one out of six parts of Bharat Nirman Programme. Under Phase 1 of this programme 60 lakh houses were expected to be constructed from 2005-06 to 2008-09 across the country. By spending Rs 21720.39 crore 71.76 lakh houses were constructed in the same period, much higher than the target. For the next five years starting from 2009-10 the target was doubled and kept at 120 lakh houses. During the second phase, 85 lakh houses have been constructed in the last three years.


Monthly reviews and Annual reports are part of the monitoring system for Indira Awaas Yojana.

Area Officers of the States and Union Territory visit the allotted states and UTs to find if everything is going on as per guidelines or not. They inspect whether the scheme has been actually implemented or not by visiting the location. Area Officers act as a connecting link between the policy makers and implementing agencies.

In year 2007 online monitoring mechanism has been put forward. With the help of this programme DRDAs can upload the monthly progress report directly to the website of the Ministry. MIS Programme ‘AWAASsoft’ further simplified the monitoring.

In the fiscal year 2012-13 the budget allotted for rural housing was Rs 11075 crore. Out of this Rs 10513.20 crore have been allocated to construct 27.27 lakh houses under IAY. This indeed is a great scheme for providing housing to all the rural poor.

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