The Union Budget has proposed an outlay of Rs 5,400 crore for the construction of houses for the rural poor during 2008-09.

Also, the government will instruct public sector banks to include Indira Awas Yojana  houses under the differential rate of interest scheme and lend up to Rs 20,000 per unit at an interest rate of four per cent.

This, along with the proposal to hike the subsidy for construction of houses from Rs 25,000 to Rs 35,000 in plain areas and Rs 27,500 to Rs 38,500 in hilly or difficult areas, is expected to give a major fillip to housing for the poor in the rural sector.

Further, the subsidy for upgradation of houses is being proposed to be increased from Rs 12,500 per unit to Rs 15,000.

Developing housing for the poor is one of the six elements of the ambitious Bharat Nirman programme and is implemented through Indira Awas Yojana.

The budget also proposes that dwelling units constructed under Indira Awas Yojana must be invariably allotted in the name of a female member of the beneficiary household or jointly in the name of both husband and wife. Only if there is no eligible female in a house should it be allotted to a male member of a family.

Construction target

During his Budget speech, Finance Minister P Chidambaram said that as against a target of constructing 60 lakh houses, 41.13 lakh houses had been constructed up to December 2007, while the cumulative number would be 51.77 lakh houses by March end.

Urban development

Three per cent of the funds to develop housing for the rural poor would be reserved for disabled persons.
The urban development sector too has an outlay of Rs 5,478.36 crore, including an amount of Rs 2,978.36 crore through the Internal and Extra Budgetary Resources route for contribution of the National Capital Region Planning Board for balanced and harmonised development in the National Capital Region specifically with a focus on the much awaited 2010 Commonwealth Games.

The outlay also includes investment in Delhi Metro, Bangalore Metro Rail Project and mass rapid transport system  in Delhi, Bangalore and Kolkata.