IAY - Indira Awaas Yojana

Last Updated : 09 Apr 2020

The Indira Awaas Yojana is a public housing scheme that was introduced by the government in 1985, as a sub-scheme of the Rural Landless Employment Guarantee Programme (RLEGP). This programme aimed to construct houses for free bonded laborers and individuals falling under the SC/ ST category. By 1994, the scheme also included non- SC/ST individuals to benefit from this scheme.

In 1996, the Indira Awaas Yojana became an independent scheme undertaken by the Ministry of Rural Development. The focus of this scheme has broadened to include eradication of rural poverty and providing rural people with various development programs.

History of Indira Awaas Yojana

The origin of the Indira Awaas Yojana can be traced back to programs such as National Rural Employment Programme (NREP) that was launched in 1980 and the Rural Landless Employment Guarantee Programme (RLEGP) that was launched in 1983 that made provisions for the construction of houses.

In the fiscal year 1995-96, the IAY program extended its coverage to widows or close family members of defense personnel who are killed in action. Ex-servicemen and retired members of the paramilitary forces were also added to the entitlements offered by this scheme under the condition that these individuals must fulfill the regular eligibility criteria set by Indira Awaas Yojana. Disabled individuals can avail 3% of funds, if they are living in rural areas and are below the poverty-line. Since the fiscal year 2006-07, the Indira Awaas Yojana has set apart funds for minorities as well.

Target Group for Eligibility

This scheme aims to provide assistance in constructing homes for poor sections of rural society. The target group includes households that are Below Poverty Line (BPL) as identified by the Gram Sabha of a village. The Indian Government will provide technical as well as financial assistance for the procurement of plots and construction of houses for these categories. The scheme extends its assistance to households headed by women (matriarchal households), ex-servicemen, SC/ST individuals, non-SC/ST rural households in the BPL category, people with handicaps, freed bonded labourers, marginalized sections of society, widows and next-of-kin to defense personnel/paramilitary forces killed in action (regardless of the income earned), etc. to construct houses.

Benefits of IAY

The purpose of this program is to:

  • Provide support during construction of houses in rural areas
  • Supporting the construction of houses with adequate provisions including workplaces within the house
  • Designing the houses based on the requirements of the dweller
  • Promoting the use of technology and material that are affordable, conducive for generating employment, adaptable, environment friendly, sustainable and easily manageable.
  • Identifying and using local material and technology to construct a house that will last for a minimum duration of 30 years at least.
  • The scheme extends its assistance to households headed by women (matriarchal households), SC/ST individuals, people with handicaps, marginalized sections of society, etc. to construct houses.
  • Empowering and encouraging Panchayats to take a lead role at the village level to plan and implement this housing programme.

Features of IAY

    • Ownership of Houses

The house that are provided under the Indira Awaas Yojana will be under the joint ownership of the husband and wife, except in the case of an unmarried individual, widower or divorced individual. Sometimes, the State may also decide to give ownership of the house to the woman in the household only. If the house is allotted to a family based on the quota of persons with disabilities or handicaps, then the ownership of the house will be in the name of that particular individual only.

    • Construction of the House

The construction of the house should be carried out by the beneficiary. Contractors or any external agency should not be involved in the construction of the house. If a contractor has been assigned then the State Government will take back the funding used on the same. Technical assistance can be offered by government agencies or departments. If support services are required then beneficiaries can take the help of Youth Clubs, Charitable Organizations, NGOs etc. for assistance in monitoring and construction.

    • Design & Construction Standards

Eco-friendly housing techniques are promoted by the government including use of local materials and construction techniques. The aim of the program is to reduce negative impact on the environment while improving the standard of living of the rural community. The guidelines stipulate that the house that is constructed should have ample space for housing a family as well as barrier-free designs for houses built for individuals with handicaps.

    • Release of Funds in Installments
  1. First installment is provided on the Awaas Divas along with the sanction order. This will amount up to 25% of the unit cost.
  2. The second installment will be provided upon reaching the level of the lintel. This installment will amount up to 60% of the cost of the house.
  3. The third installment is provided to the beneficiary once the house has a bathroom/latrine and he/she has started staying in the house. The installment will amount up to 15% of the cost of the house.

The installments will be released to the beneficiary after a designated officer or authority verifies the work completion and progress of the construction and this will be updated in AwaasSoft with photos as evidence. Beneficiaries will receive payment only via Post Office account or Bank Account. Only in special cases wherein the Empowered Committee sanction payment in cash, will the beneficiary receive the same.

  • Construction Time Limit

The time limit placed on the completion of housing construction are as follows:

First Stage(Lintel level Construction) : 9 months from the date of receipt of the 1st installment

Second Stage(Completion) : 9 months from the date of receipt of the 2nd installment>

Special Projects undertaken by IAY

The Indira Awaas Yojana (IAY) provides reserve funds availed from the Central government for special Projects in the States/Union Territories for purposes such as:

  • Rehabilitation of rural families that are below the poverty line, if they are affected by law and order issues or violent outbreaks
  • Rehabilitation of rural families that are below the poverty line, who are negatively affected by natural calamities such as storms, floods, etc.
  • Providing settlement for liberated manual scavengers and freed bonded laborers.
  • Providing settlement for vulnerable tribal societies.
  • Rehabilitation of people who are affected by occupational diseases from Asbetos, Silicosis, pesticides, etc. or individuals who are affected by epidemic diseases such as “Kala-azar”.
  • Settlement of families who are included under “The Scheduled Tribes and Other Traditional Forest Dwellers Act, 2006”. They are commonly called the FRA beneficiaries.
  • Settlement of families who are forced to relocate from districts along the international border.
  • Demonstration of new technology, with special focus on affordable and eco-friendly technologies.

Funding & Allocation of Funds

This scheme is financed by the Central and the State Government on a price sharing basis. The ratio of price sharing among the two authorities is 75:25 percent, with an exclusion of projects in states that are a part of North-East and Union Territories. The Central Government will take care of funding 90% of the project cost for finance for North-East states and the full price of financing for Union Territories. The Central Government of India and the State Governments share 50:50 percent cost of procuring the house sites.

  • Sixty per cent of the funds are allocated to SC/ST category in the national level. The proportion in which it will be divided among the SC and ST will be determined by the Ministry of Rural Development.
  • Fifteen per cent of the finance set apart is offered to the minority sections of society.
  • Three per cent of the funding is offered to individuals with disabilities who live in rural areas and fall below the poverty line.

If people do not fall under the category of beneficiaries listed by the Ministry in a particular district the Collector or the CEO of the Zilla Parishad must certify the same and make necessary changes in the online software “Awaas Soft”. The allocation of funds will be made as follows:

  • Ninety Five percent of the funds allocated under this program will be used for purchase of items for new houses, buying housing sites, upgradation of houses and also for administrative expenses.
  • Five percent of the funding that remains, will be used for the special projects undertaken by the Indira Awaas Yojana.

The Ministry of Rural Development should allocate the funds based on the following criteria:

  • 75% weightage is to be given to housing shortage in rural regions and 25% weightage is to be given to the individuals who are below the poverty line.
  • Up to twenty percent of a district’s funds allocated can be used to upgrade dilapidated/kutcha houses for the families that are below poverty line, as determined by the State concerned.


Since 1985, the Indira Awaas Yojana has helped to build around 25.2 million houses. Under the Bharat Nirman Programme, one of the six parts is Rural Housing. Phase 1 of this programme had aimed at constructing 60 lakh houses from the period 2005-06 to 2008-09, in India. The finance that was set apart for this project was Rs. 21720.39 crore and with this, close to 71.76 lakh houses were constructed in this period, which is much higher than the expected target. From 2009-10, the target number of houses to be constructed had doubled and the number of houses constructed amounted to 120 lakh. 85 lakh houses have been constructed over the last few years during the next phases of this scheme.


Indira Awaas Yojana is a program supported by the Central Government that is allotment based. This scheme is financed by the Central & the State Government on a price sharing basis. The ratio of price sharing among the two authorities is 75:25 percent, with an exclusion of projects in states that are a part of North-East and Union Territories. The Central Government will take care of funding 90% of the project cost for finance for North-East states and 100% financing for Union Territories. The finance is distributed to the states on the following basis: 75% weightage to rural homes shortage and 25% weightage to the dearth ratio.

Agency for Implementation

The power to implement the Indira Awaas Yojana is given to the Zilla Parishad at the district level and if there are no Zilla Parishads in a State, then an authority which is an equivalent to the same should assume responsibility.

Village Panchayats are responsible for overseeing and implementing the guidelines set by the Indira Awaas Yojana, at the local level. If there are no Village Panchayats in a State, then an authority which is an equivalent to the same should assume responsibility. In case the Village Panchayats is too small to undertake this task, then the State can hand over the intermediate level responsibility to the Panchayat.

Empowered Committee

There will be an “Empowered Committee” in which the chairperson will be the Secretary of Rural Development/ the Additional Secretary of Rural Development. It will consist of members such as the Joint Secretary of Rural Housing, Adviser from the Planning Commission, HUDCO representative, Knowledge Network representative, representatives from 2 NGOs that are related to the field of construction, the State’s Secretary who deals with Rural Housing and an I.F.D representative. This committee will make several decisions related to the program, such as reallocation of funds, new house construction targets, give permission for cash payments, sanction special projects, approve new technologies for construction, review of the program, and much more.


There is a systematic monitoring system that is undertaken by the authorities of the Indira Awaas Yojana. There are monthly reviews and annual reports that are made as a part of this monitoring system. Area Officers of the region visit the allotted states and Union Territories to check whether everything is functioning as per guidelines of this program or not. The inspection done by them will determine if the scheme has been properly implemented, by visiting the location. Area Officers are the connecting link between the policy makers and the agencies that implement the policies.

The online monitoring mechanism was introduced in 2007. District Rural Development Agencies (DRDAs) can upload the monthly progress report directly to the Ministry’s website, with the help of the online monitoring mechanism. The online programme used is called the ‘AWAASsoft’ which is a MIS Programme. This simplifies the monitoring method to a great extent.


  1. Who decides how many houses are built in a district each year?
  2. The Zilla Parishads, Village Panchayats and/or District Rural Development Agencies decide how many houses have to be built or upgraded in a particular Panchayat each year, as per the guidelines of Indira Awaas Yojana.

  3. How are beneficiaries selected?
  4. Beneficiaries are selected from the Indira Awaas Yojana waiting list that is prepared by the authorities or as per the list of below poverty line families in rural areas. The poorest families are given the highest priority.

  5. What are the benefits for women under this program?
  6. Women are given ownership of the house if the house is allotted under the quota of matriarchal households. Most of the time if the family consists of a married couple, both the husband and the wife will have joint ownership.

  7. Does the program provide a provision for buying housing plots?
  8. Yes, the program provides a provision for buying housing plots for beneficiaries who are landless.

  9. Is a beneficiary eligible to get more than one house?
  10. No, a beneficiary is not eligible to get more than one house.

  11. Who can I contact in order to enquire more about this program?
  12. You can contact the Ministry of Rural Development, State Government, Village Panchayat, District Rural Development Agencies or the Gram Panchayat in order to get more information on the Indira Awaas Yojana. Ministry of Rural Development also has an official website that offers additional information on the same.

News About Indira Awaas Yojana

  • The State Government of Odisha says the 8.5 lakh rural houses were funded by the Indira Awas Yojana (IAY)

    The Odisha State Government has said that around 8.5 lakh houses that were constructed as part of the Biju Pucca Ghar Yojana (BPGY) were sponsored by the Indira Awas Yojana (IAY). Around 10 lakh houses were built for the rural poor under the Biju Pucca Ghar Yojana (BPGY). According to the State Government's report , 10,08,586 housing units were constructed between April 1, 2014 and May 27, 2016. Out this number, 1,59,304 houses were built under the Biju Pucca Ghar Yojana (BPGY) and 8,49,282 houses fell under the Indira Awas Yojana (IAY).

    2 June 2016

  • Indira Awaas Scheme’s Slow Progress Blamed on Central Government

    The state government of Bihar has said that affordable housing scheme under the Indira Awaas Yojana for BPL families in the state was moving at a slow pace as funds still haven’t been released for 9 districts out of 28 total districts. The centre meanwhile has claimed that second instalment for 28 districts was released this year in January for the period of 2014-15. Utilization certificates have been slow in coming and opposition has asked for action against lax officers.

    24 March 2016

  • Rural schemes and their implementation needs to be stressed upon

    Schemes such as the Mahatma Gandhi National Rural Employment Guarantee (MGNREGA), Rajiv Gandhi Rural Electrification Yojana (RGREY), National Social Assistance Program, Indira Awas Yojana (IAY), Pradhan Mantri Gram Swarozgar Yojana (PGSY), National Rural Livelihood Mission (NRLM), etc were discussed by the District Vigilance and Monitoring Committee (VMC) on Wednesday. The discussion was chaired by the Union Minister for Sports and Youth Affairs (I/N) Sarbananda Sonowal. He stressed on the need to implement the rural schemes properly, making it a programme where people could gain maximum benefits. For example with the MGNREGA to ensure that people with job cards receive their wages on time.

    3 March 2016

  • Rs 1.9 crore scam under Indira Awas Yojana

    A complaint by a prominent leader in Kapurthala has brought the local authorities into limelight, with charges of embezzlement under the Indira Awas Yojana. According to the complaint, money to the tune of Rs 1.9 crore was siphoned off under the pretext of the scheme. The money was originally meant to be used for the betterment of those living below the poverty line in the district, but ended up in the pockets of certain officials.

    1 March 2016

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

This Page is BLOCKED as it is using Iframes.