New Delhi, Jan. 10: The cabinet today took a "middle path" in a tussle between the rural development and finance ministries over an increase in assistance under a central housing scheme for the poor.
"The cabinet took a middle path," rural development minister Jairam Ramesh, whose department wanted a hike higher than what the P. Chidambaram-headed finance ministry was prepared to allow, said after the cabinet meeting.
The final decision increases the assistance to individual beneficiaries under the Indira Aawas Yojana from Rs 45,000 to Rs 70,000 in the plains and from Rs 48,500 to Rs 75,000 in hilly tracts and Maoist-affected areas. The increase, between 54 and 55 per cent, will be effective from April.
Ramesh's ministry wanted the assistance raised to Rs 75,000 and Rs 80,000 in the two zones respectively ' an increase of 64 to 66 per cent.
The finance ministry had opposed the plan and suggested it could at most settle for a jump of 44 per cent to Rs 65,000 and Rs 70,000.
Chidambaram's ministry had tried to build its case by pointing out that the beneficiaries are also entitled to get up to Rs 20,000 as loans from banks under another related plan, the Differential Rate of Interest (DRI) scheme, at an interest rate of 4 per cent.
The ministry was of the view that a hike of Rs 20,000 was enough given the additional provision of low-interest loans, sources said.
Ramesh's ministry countered the argument by saying the DRI scheme had failed to get a good response. Nearly 30 lakh beneficiaries avail of the Indira Aawas Yojana assistance every year. But only 44,000 beneficiaries took bank loans under the DRI plan last year.
The Centre has been implementing the Indira Aawas scheme since 1985-86. Its budgetary allocation for 2012-13 was Rs 11,000 crore, which could be increased to Rs 15,000 crore next year.
The cabinet also decided to double to Rs 20,000 the assistance to landless Indira Aawas beneficiaries to purchase homestead land. The finance ministry had opposed this hike, too.
Ramesh had promised the homestead increase when he went to a protest by landless people in Agra last October.
"The finance ministry had not agreed to double the land assistance. But the cabinet in its collective wisdom decided to honour the agreement reached with Ekta Parishad," the minister said today, referring to the group that was spearheading the agitation.
Ramesh also said people other than those from BPL families could be brought under the scheme. The beneficiaries will be selected on the basis of household and deprivation data being collected under the ongoing Socio-Economic Caste Census. A committee headed by Planning Commission member Abhijit Sen has been asked to suggest the selection criteria.