With an aim of helping rural poor to have their own affordable houses, Government on Thursday raised the amount of assistance from Rs 45,000 to Rs 70,000 for construction of a dwelling unit.

For hilly and other difficult areas, the grants for constructing houses under the Indira Awaas Yojna (IAY) have been increased from Rs 48,500 crore to Rs 75,000.

There will also be a provision now of loan up to Rs 20,000 — up from Rs 10,000 — with four per cent interest for buying land for the house.

Union Cabinet on Thursday approved the proposal of the Ministry of Rural Development to provide quality and affordable houses and increase the unit cost taking into account numerous requests from the stakeholders keeping in view the steep increase in cost of materials, Finance Minister P Chidambaram told a press conference here.

Rural Development Ministry’s proposal was to hike in allocation of grants for construction of houses for BPL families under the IAY from Rs 45,000 to Rs 75,000 per dwelling unit, but Finance Ministry reportedly fixed the amount at Rs 65,000.

“Finance Ministry had wanted Rs 45,000 to Rs 65,000. We had wanted Rs 45,000 to Rs 75,000. So Cabinet has taken a middle path. Finance Ministry had not agreed to doubling the amount to be given to the landless for buying land but Cabinet has agreed to that,” he said.

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