Settu, a veteran engaged in inland fishing and a resident of Vazhuthalampattu village panchayat in Kurijinipadi block of Cuddalore district, is a worried man. The deadline for payment of the next instalment of his home loan is approaching. He has to pay about ₹10,500 every month to a private, informal lender.
Unwilling to divulge too many details about his loan, the senior citizen says he had to approach the private lender a few years ago when his wife, Vasantha, was chosen as a beneficiary under the Thane Housing Scheme (THS).
Formulated in the wake of Cyclone Thane, which caused large-scale destruction in Cuddalore and parts of Villupuram district in December 2011, the scheme was meant for those whose huts and tiled houses had been fully damaged.
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Norm breached
Even though the government had stipulated that the size of the houses should be 200 sq.ft., the norm was honoured more in the breach than in the observance. “We knew that it was a one-time opportunity. This was why we decided to construct bigger houses than what had been prescribed by the authorities, even though this would cause us a considerable amount of economic hardship,” explains Anjalakshmi, Settu’s neighbour, who has taken a loan of over ₹5 lakh.
If one were to go by what Settu and Anjalakshmi say, they seem to be paying exorbitant rates of interest, ranging from 24% to 48%. The unit cost fixed under the THS was ₹1 lakh.
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This is not unique to Kurunjipadi block. Beneficiaries in Panickankuppam village panchayat of Panruti block or Suthukulam village of Cuddalore block or in the Koliyanur habitation of Villupuram district have similar stories to tell.
There are some beneficiaries, especially those belonging to Scheduled Caste/Scheduled Tribe communities, who have stuck to the government norms with regard to the size of the house and the materials to be used for construction. “This speaks of my community’s limited capacity to mobilise resources,” says Arunchalam, a senior citizen belonging to the SCs and hailing from Panickankuppam. His three sons have got houses under the scheme. Two of them have built their houses in sync with the norms while one has deviated on the flooring.
Elsewhere in Cuddalore district, some “Thane houses”, as they have come to be known, have marble flooring, and the doors and windows look flashy. “While we bring to the attention of the beneficiaries that it would be in their interests to stick to the norms, we do not prevent them from building their homes in an ambitious way. After all, the scheme is beneficiary-driven,” explains an official in charge of the scheme.
Girija, a resident of Suthukulam, says that when the government finalises a similar housing scheme for those affected by Cyclone Gaja, it should provide more financial assistance, both in terms of grant and loan.
At present, under the Prime Minister’s rural housing scheme, even though the unit cost has been fixed at ₹1.2 lakh per house, the State government provides ₹50,000 towards reinforced cement concrete roofing, apart from a contribution of ₹48,000 towards the unit cost. The Central government’s share is ₹72,000. As beneficiaries of the scheme are invariably covered under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), they are paid wages for 90 days at the rate of ₹224 per day towards the labour component of the house’s cost. In total, each house fetches ₹2,02,160. In addition, banks provide a loan of ₹20,000 at a nominal rate of 4% without insisting on documents. The loan repayment happens automatically through the banks as the beneficiaries get wages under MGNREGS credited to their accounts.
If the State government increases its assistance by ₹30,000 per beneficiary and arranges for a specific home loan of ₹50,000 to ₹1 lakh for such beneficiaries, the practice of people in rural areas relying on private lenders would come down drastically, a Cuddalore-based official says.