CHAPTER – 5
RELEASE AND MANAGEMENT OF FUNDS
5.1 Allocation
The allocation of funds to the States and from the States to districts and below shall be made as per para 3.5.
5.2 Proposals to be made State wise
The State shall be the unit for purpose of sending proposals to the Government of India. The State shall send one consolidated proposal to Ministry of Rural Development for each instalment, giving District wise information required for the release of the instalment as required in para 5.4 and 5.5. All information should be as per entries in AwaasSoft only. The State Governments will have to put in place a robust mechanism to ensure adequate scrutiny of the District level documentation. Due diligence on district level proposals will be carried out by the State Government department concerned. The consolidated proposal for the first instalment should also indicate the district wise allocations and the formula and methodology used to arrive at the allocation. Conditionalities will now be applicable at State level, monitoring mechanisms will also need to be improved to ensure that delay or default in any one District does not affect flow of funds to the State.
The Ministry will continue to release funds to Districts directly on the basis of the consolidated proposal, till such time an alternative system is worked out.
5.3 Release of funds
Fund releases shall be as follows:-
(i) The annual allocation will be released in two instalments.
(ii) First instalment shall be equal to 50% of annual allocation fixed in accordance with the provision in para 3.5.
(iii) Second instalment shall be equal to the annual allocation minus first instalment and applicable deductions as in para 5.6.
(iv) All releases would be made to designated accounts of Districts as per guidelines issued by the Ministry from time to time.
(v) In the case of Districts/UTs namely, Kinnaur, Lahul - Spiti, Leh and
Kargil districts and the UT of Andaman & Nicobar Islands having
- 21 -
limited working season and any other such areas as may be decided by the Empowered Committee, the entire central assistance may be released in one instalment. The State should also release its share in one instalment
5.4 Procedure for release of first instalment
I. 1st instalment shall be released in respect of all Districts who have taken the 2ndinstalment in the previous year. From 2014-15 this will also be subject to the fulfilment of the condition that the selection of beneficiaries is completed and the list is uploaded in AwaasSoft.
II. Districts who have not received the 2ndinstalment of
previous financial year have to submit proposals for
1stinstalment alongwith all requisite documents which were required to be submitted for the release of
2ndinstalment of previous financial year.
5.5 Procedure for release of second instalment
Release of second installment to the State will be subject to the following conditions:-
(i) Utilization of at least 60% of total available funds (equal to opening balance plus releases during the year and miscellaneous receipts).
(ii) Fulfillment of conditionalities, if any, indicated during earlier releases.
(iii) Completion of 100% of sanctioned houses more than three years old and 75% of houses sanctioned two to three years ago.
(iv) Data entry in AwaasSoft reflecting utilisation of funds and
completion of houses.
The State government shall furnish the following documents along with the proposal:-
(i) Utilization Certificate (for State as a whole) for the funds received during the previous financial year based on Utilisation Certificate
and Audit Reports received from the districts.
- 22 -
(ii) Utilization Certificate for funds received during the current financial year.
(iii) A certificate that Utilization Certificate/Audit Report and Bank
Reconciliation Statement for the previous financial year have been received from all the districts and these have been examined and found to be in order. The certificate will specifically mention that the Audit Report does not refer to any irregularities on which ATR is required or the ATR on the observations have been received and they are in order.
(iv) Statement indicating the district-wise financial position covering the following:-
(a) Opening Balance (including unencashed cheques and
unadjusted advances), central and state share received and miscellaneous receipts during previous financial year;
(b) Total availability of funds, Expenditure and Closing Balance during previous financial year as per Utilization Certificate/Audit Report received from districts;
(c) The Central and State shares received, interest accrued and miscellaneous Receipts during the current financial year upto the latest date available;
(d) Total availability of funds and expenditure during the current financial year up to the latest date available.
(v) A certificate that the administrative expenses have been incurred on permissible items within the approved ceiling.
(vi) A certificate that funds have been transferred to the beneficiaries as per provisions of the guidelines.
(vii) Copies of sanction orders releasing the state share for the previous and current financial year.
(viii) Non-diversion and non-embezzlement certificate.
(ix) Certificate that the IAY funds have been kept in a separate Savings
Bank account in a nationalized bank. (x) Bank details in prescribed format.
A check list for release of 2ndinstalment and a proforma for submission of the proposal for 2ndinstalment are at Annexes I and II. A model format for
Utilization Certificate is given at Annexe III.
- 23 -
The State should nominate a senior officer (Head of Department) to sign the proposal (Authorised Signatory) to be sent to Government of India. The State should nominate another officer (nodal officer) to monitor the progress of data entry in the AwaasSoft and ensure that the proposal is in line with the data.
5.6 Release of State share
The State Government should release the full state share corresponding to the central share and allocate it among the districts within 15 days of release of central share. The state share of the 4% administrative expenses should also be released simultaneously. A copy of the allocation order should be endorsed to the Ministry.
If there is shortfall in state share pertaining to the previous financial year proportionate deduction shall be made to the extent of unmatched central release from the 2nd instalment of central share (i.e. 03 times the shortfall in case of Non- NE states and 09 times the shortfall in case of NE states).
5.7 Reallocation
No proposal for 2ndinstalment will be entertained after end of December of the financial year. However, for States to adjust to the new cycle, a grace period of three years from 2013-14 would be given during which period the proposals could be submitted till end of January. If proposal for 2nd instalment is not received by this date, the balance allocation earmarked for the defaulting States as well as any available savings out of the 5% reserve fund shall be proportionately reallocated among other States in the month of February on the basis of magnitude of expenditure of above 60% including second instalment as the determining factor. Reallocation would be done to State Governments submitting specific proposal for additional release after having utilised 60% of available funds by January. And if the reserve of 5% is fully committed and there are more eligible proposal for special projects, they would be given priority. Reallocation will be done with the approval of the Empowered Committee.
5.8 Management of IAY Account
(i) At the District level, lAY funds (Central share as well as State share) shall be kept in a nationalised bank in an exclusive and separate Savings Bank
account by the Zilla Parishad/DRDA. The State government will
- 24 -
communicate to the Ministry details of the Bank Branch and Account numbers and also enter the details in AwaasSoft and CPSMS.
(ii) The interest amount accrued on the deposits of the lAY funds shall be
treated as part of the lAY resources (in the ratio of 75 : 25 as Central and
State shares).
(iii) The Districts will follow the accounting procedures prescribed by the Ministry of Rural Development. The finalised district level accounts of the previous year shall be got approved by the Zilla Parishad on or before 30th June and got audited on or before 31st August of the same year. The accounts Zilla Parishad/DRDA shall show the interest earned separately.
(iv) Drawal of funds from the accounts shall only be made for incurring expenditure under the lAY.
(v) All such accounts will be auditable by the CAG.
5.9 Payment to beneficiaries
Payment to beneficiaries shall be made into her/his Bank/Post Office account only except in cases where prior permission to pay in cash has been taken from the Empowered Committee. The account details and Aadhaar number, if any, shall be entered in AwaasSoft so that the account of the beneficiary can be directly credited using the eFMS module of AwaasSoft as soon as the module is operationalised. All payments to beneficiaries must be reflected in AwaasSoft so as to enable the Implementing Agency and the Ministry to know the status of expenditure and balance in hand at the District level and below.
CHAPTER – 6
SUPPORT SYSTEMS
States need to put in place a robust system to provide support services to the families constructing houses under the Scheme. These include -
6.1 Dissemination of appropriate building technologies
The State should proactively identify appropriate building technologies focusing on use of local materials. These should be conveyed to the beneficiaries through booklets, pamphlets, videos, models and prototypes built in accessible locations.
Natural factors such as building orientation, wind direction, vegetation, drainage, and contours of the land along with awareness of locally available materials should be factored into housing design.
Good construction practices in such housing would include:
a. Half Brick Wall b. Rat-trap Bond c. Jali Wall
d. Filler Slabs e. Arches
f. Frameless Doors And Windows g. Rubble Masonry
h. Bamboo Construction i. Mud Construction
j. Built-in Furniture
6.2 Capacity Building
States should prepare a capacity building plan to strengthen the quality of implementation. The States may assign the task to SIRD or any other State level institution for this purpose. The capacity building plan should have the following elements:-
(a) Training of district level officials;
- 26 -
(b) Training of cutting edge level functionaries;
(c) Training of trainers especially for Community Resource Persons, masons and other extension workers;
(d) Orientation and training of Quality Monitors;
(e) Training of elected representatives of Panchayats
6.3 Transfer of Technology
The States must put in place a system for transfer of technology. This can be done best through utilization of Community Resource Persons (CRPs) suitably trained for this purpose availing services of reputed NGOs. The CRPs and NGOs have to closely work with the beneficiaries as well as the local masons and help the beneficiary families to make a proper choice and later assist them in implementing it on ground.
6.4 Technology Facilitation Centres
Utilizing the facilities of educational institutions or building centres, Technology Facilitation Centres may be opened at convenient locations and all beneficiaries informed about them at the time of selection itself.
6.5 Fixing rates of material
District Collector may fix rates for materials at different points and empanel suppliers following due procedure and intimate these to the beneficiaries so that they can benefit. However, the final choice would be that of the beneficiary. For cement, steel and similar items, State Government could fix the maximum price after negotiation with the suppliers and let the beneficiaries know of the details.
6.6 Prefabrication
Prefabrication of certain structures and materials may be done where volumes at the district level justify and the beneficiaries prefer them. This could include doors, windows, tiles, roofing etc.
6.7 Training Masons
Master masons should be trained in different building technologies which are relevant locally and in cost reduction methods. Wherever feasible, women mason groups should also be created after adequate training. The list and contact
- 27 -
addresses of such masons and groups should be made available to the beneficiaries.
6.8 Convergence
(i) Toilet
For all IAY houses, construction of toilets under Nirmal Bharat Abhiyan (NBA) is mandatory. The State Governments should put in place a system which facilitates this, covering fund flows, accounting, reporting, etc. It should be ensured that the beneficiary has to approach only one agency for the IAY and NBA components.
(ii) Drinking water
Potable drinking water should be provided to all IAY households by converging the State and Central Government programmes relating to drinking water. Also drinking water wells can be constructed using MGNREGS for an individual house or a group of houses.
(iii) Electricity
Electrification should be provided under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) or any State scheme and in areas where there is no electricity, solar lights should be provided.
(iv) Land development
The lands of individual beneficiaries or habitats may be developed using MGNREGS. The Scheme can also be used for soil conservation and protection, bio-fencing, planting of avenue trees, construction of playgrounds, etc.
(v) Social security
Since IAY beneficiaries are below poverty line, they may be automatically provided benefit of Rastriya Swasthiya Bima Yojana (RSBY) or State Level Health Insurance Scheme in those States where RSBY is not implemented. Life Insurance Corporation runs insurance policies for the poor like Janshree Bima Yojana and Aam Aadmi Bima Yojana. The IAY beneficiaries may be enrolled into one of the schemes as suitable to them.
(vi) Connectivity
- 28 -
Connectivity may be provided in the form of paved pathways, roads or steps using MGNREGS and relevant State schemes.
In order to bring about convergence a state level meeting may be held exclusively for the purpose by the Chief Secretary by January of every year in which all the State level departments/agencies responsible for different schemes may be called and an action plan for convergence prepared to ensure that there is automatic and simultaneous convergence in favour of IAY beneficiaries, as they all belong to families in real need.
6.9 Mobilising additional resources
The amount provided under IAY may not be sufficient in all places for construction of houses with facilities adequate for the family. Therefore, additional resources need to be mobilized as follows:
(i) Supplementary grants from the State Government:
State Governments may provide supplementary grants from their budget as additionality. This is particularly relevant for SCs/STs where funds may be pooled from SCSP and TSP.
(ii) Mobilisation of DRI Loans:
Nationalized Banks have been instructed by the RBI to provide loans upto Rs.20,000/- per house at an interest rate of 4% per annum under the Differential Rate of Interest (DRI) Scheme to SC/ST beneficiaries. To ensure its implementation, the following methodology is suggested:-
(a) Hold a meeting of State Level Bankers Committees (SLBC) to discuss the scheme and take collective decision on modalities;
(b) Assign responsibilities to the DLBC as per district level targets;
(c) At the district level, bank-wise targets may be finalized according to their service area;
(d) Once the beneficiary selection is finalized, in the initial meeting of the beneficiaries, applications for DRI loan should be collected and submitted in the bank branch concerned. A functionary may be assigned the task of following up these applications.
- 29 -
(e) Monitoring of the sanction of DRI loans should be done at the block, district and state levels including at BLBC/DLBC/SLBC levels. At the district and state level, a senior officer should be made responsible for responding to grievances related to non-sanction of DRI loans and sort them out in consultation with the banks concerned.
(iii) Mobilisation of other loans
States may also arrange loans from banks, including cooperative banks to IAY beneficiaries, to supplement the grant assistance, in a schematic manner. The maximum amount of such loan could be Rs.50,000/- and the rate of interest could be subsidized on prompt payment. Detailed guidelines may be issued after working out the scheme in consultation with the banks and cooperatives. Wherever such loans are provided, the beneficiaries have to be sensitized on repayment requirements and their willingness obtained.
(iv) Formulation of subsidy-linked projects availing loans from banks/financial institutions:
State Governments are free to formulate projects which would provide subsidy using IAY funds (within the amount permissible), linked to assured loans from banks including cooperative banks or financial institutions like HUDCO. For coordinating implementation, the States could use the services of organizations of repute and meet their service charges from the provision for administrative expenses and if they are not sufficient, from state funds. Such special projects need the prior approval of the Empowered Committee.
****
RELEASE AND MANAGEMENT OF FUNDS
5.1 Allocation
The allocation of funds to the States and from the States to districts and below shall be made as per para 3.5.
5.2 Proposals to be made State wise
The State shall be the unit for purpose of sending proposals to the Government of India. The State shall send one consolidated proposal to Ministry of Rural Development for each instalment, giving District wise information required for the release of the instalment as required in para 5.4 and 5.5. All information should be as per entries in AwaasSoft only. The State Governments will have to put in place a robust mechanism to ensure adequate scrutiny of the District level documentation. Due diligence on district level proposals will be carried out by the State Government department concerned. The consolidated proposal for the first instalment should also indicate the district wise allocations and the formula and methodology used to arrive at the allocation. Conditionalities will now be applicable at State level, monitoring mechanisms will also need to be improved to ensure that delay or default in any one District does not affect flow of funds to the State.
The Ministry will continue to release funds to Districts directly on the basis of the consolidated proposal, till such time an alternative system is worked out.
5.3 Release of funds
Fund releases shall be as follows:-
(i) The annual allocation will be released in two instalments.
(ii) First instalment shall be equal to 50% of annual allocation fixed in accordance with the provision in para 3.5.
(iii) Second instalment shall be equal to the annual allocation minus first instalment and applicable deductions as in para 5.6.
(iv) All releases would be made to designated accounts of Districts as per guidelines issued by the Ministry from time to time.
(v) In the case of Districts/UTs namely, Kinnaur, Lahul - Spiti, Leh and
Kargil districts and the UT of Andaman & Nicobar Islands having
- 21 -
limited working season and any other such areas as may be decided by the Empowered Committee, the entire central assistance may be released in one instalment. The State should also release its share in one instalment
5.4 Procedure for release of first instalment
I. 1st instalment shall be released in respect of all Districts who have taken the 2ndinstalment in the previous year. From 2014-15 this will also be subject to the fulfilment of the condition that the selection of beneficiaries is completed and the list is uploaded in AwaasSoft.
II. Districts who have not received the 2ndinstalment of
previous financial year have to submit proposals for
1stinstalment alongwith all requisite documents which were required to be submitted for the release of
2ndinstalment of previous financial year.
5.5 Procedure for release of second instalment
Release of second installment to the State will be subject to the following conditions:-
(i) Utilization of at least 60% of total available funds (equal to opening balance plus releases during the year and miscellaneous receipts).
(ii) Fulfillment of conditionalities, if any, indicated during earlier releases.
(iii) Completion of 100% of sanctioned houses more than three years old and 75% of houses sanctioned two to three years ago.
(iv) Data entry in AwaasSoft reflecting utilisation of funds and
completion of houses.
The State government shall furnish the following documents along with the proposal:-
(i) Utilization Certificate (for State as a whole) for the funds received during the previous financial year based on Utilisation Certificate
and Audit Reports received from the districts.
- 22 -
(ii) Utilization Certificate for funds received during the current financial year.
(iii) A certificate that Utilization Certificate/Audit Report and Bank
Reconciliation Statement for the previous financial year have been received from all the districts and these have been examined and found to be in order. The certificate will specifically mention that the Audit Report does not refer to any irregularities on which ATR is required or the ATR on the observations have been received and they are in order.
(iv) Statement indicating the district-wise financial position covering the following:-
(a) Opening Balance (including unencashed cheques and
unadjusted advances), central and state share received and miscellaneous receipts during previous financial year;
(b) Total availability of funds, Expenditure and Closing Balance during previous financial year as per Utilization Certificate/Audit Report received from districts;
(c) The Central and State shares received, interest accrued and miscellaneous Receipts during the current financial year upto the latest date available;
(d) Total availability of funds and expenditure during the current financial year up to the latest date available.
(v) A certificate that the administrative expenses have been incurred on permissible items within the approved ceiling.
(vi) A certificate that funds have been transferred to the beneficiaries as per provisions of the guidelines.
(vii) Copies of sanction orders releasing the state share for the previous and current financial year.
(viii) Non-diversion and non-embezzlement certificate.
(ix) Certificate that the IAY funds have been kept in a separate Savings
Bank account in a nationalized bank. (x) Bank details in prescribed format.
A check list for release of 2ndinstalment and a proforma for submission of the proposal for 2ndinstalment are at Annexes I and II. A model format for
Utilization Certificate is given at Annexe III.
- 23 -
The State should nominate a senior officer (Head of Department) to sign the proposal (Authorised Signatory) to be sent to Government of India. The State should nominate another officer (nodal officer) to monitor the progress of data entry in the AwaasSoft and ensure that the proposal is in line with the data.
5.6 Release of State share
The State Government should release the full state share corresponding to the central share and allocate it among the districts within 15 days of release of central share. The state share of the 4% administrative expenses should also be released simultaneously. A copy of the allocation order should be endorsed to the Ministry.
If there is shortfall in state share pertaining to the previous financial year proportionate deduction shall be made to the extent of unmatched central release from the 2nd instalment of central share (i.e. 03 times the shortfall in case of Non- NE states and 09 times the shortfall in case of NE states).
5.7 Reallocation
No proposal for 2ndinstalment will be entertained after end of December of the financial year. However, for States to adjust to the new cycle, a grace period of three years from 2013-14 would be given during which period the proposals could be submitted till end of January. If proposal for 2nd instalment is not received by this date, the balance allocation earmarked for the defaulting States as well as any available savings out of the 5% reserve fund shall be proportionately reallocated among other States in the month of February on the basis of magnitude of expenditure of above 60% including second instalment as the determining factor. Reallocation would be done to State Governments submitting specific proposal for additional release after having utilised 60% of available funds by January. And if the reserve of 5% is fully committed and there are more eligible proposal for special projects, they would be given priority. Reallocation will be done with the approval of the Empowered Committee.
5.8 Management of IAY Account
(i) At the District level, lAY funds (Central share as well as State share) shall be kept in a nationalised bank in an exclusive and separate Savings Bank
account by the Zilla Parishad/DRDA. The State government will
- 24 -
communicate to the Ministry details of the Bank Branch and Account numbers and also enter the details in AwaasSoft and CPSMS.
(ii) The interest amount accrued on the deposits of the lAY funds shall be
treated as part of the lAY resources (in the ratio of 75 : 25 as Central and
State shares).
(iii) The Districts will follow the accounting procedures prescribed by the Ministry of Rural Development. The finalised district level accounts of the previous year shall be got approved by the Zilla Parishad on or before 30th June and got audited on or before 31st August of the same year. The accounts Zilla Parishad/DRDA shall show the interest earned separately.
(iv) Drawal of funds from the accounts shall only be made for incurring expenditure under the lAY.
(v) All such accounts will be auditable by the CAG.
5.9 Payment to beneficiaries
Payment to beneficiaries shall be made into her/his Bank/Post Office account only except in cases where prior permission to pay in cash has been taken from the Empowered Committee. The account details and Aadhaar number, if any, shall be entered in AwaasSoft so that the account of the beneficiary can be directly credited using the eFMS module of AwaasSoft as soon as the module is operationalised. All payments to beneficiaries must be reflected in AwaasSoft so as to enable the Implementing Agency and the Ministry to know the status of expenditure and balance in hand at the District level and below.
CHAPTER – 6
SUPPORT SYSTEMS
States need to put in place a robust system to provide support services to the families constructing houses under the Scheme. These include -
6.1 Dissemination of appropriate building technologies
The State should proactively identify appropriate building technologies focusing on use of local materials. These should be conveyed to the beneficiaries through booklets, pamphlets, videos, models and prototypes built in accessible locations.
Natural factors such as building orientation, wind direction, vegetation, drainage, and contours of the land along with awareness of locally available materials should be factored into housing design.
Good construction practices in such housing would include:
a. Half Brick Wall b. Rat-trap Bond c. Jali Wall
d. Filler Slabs e. Arches
f. Frameless Doors And Windows g. Rubble Masonry
h. Bamboo Construction i. Mud Construction
j. Built-in Furniture
6.2 Capacity Building
States should prepare a capacity building plan to strengthen the quality of implementation. The States may assign the task to SIRD or any other State level institution for this purpose. The capacity building plan should have the following elements:-
(a) Training of district level officials;
- 26 -
(b) Training of cutting edge level functionaries;
(c) Training of trainers especially for Community Resource Persons, masons and other extension workers;
(d) Orientation and training of Quality Monitors;
(e) Training of elected representatives of Panchayats
6.3 Transfer of Technology
The States must put in place a system for transfer of technology. This can be done best through utilization of Community Resource Persons (CRPs) suitably trained for this purpose availing services of reputed NGOs. The CRPs and NGOs have to closely work with the beneficiaries as well as the local masons and help the beneficiary families to make a proper choice and later assist them in implementing it on ground.
6.4 Technology Facilitation Centres
Utilizing the facilities of educational institutions or building centres, Technology Facilitation Centres may be opened at convenient locations and all beneficiaries informed about them at the time of selection itself.
6.5 Fixing rates of material
District Collector may fix rates for materials at different points and empanel suppliers following due procedure and intimate these to the beneficiaries so that they can benefit. However, the final choice would be that of the beneficiary. For cement, steel and similar items, State Government could fix the maximum price after negotiation with the suppliers and let the beneficiaries know of the details.
6.6 Prefabrication
Prefabrication of certain structures and materials may be done where volumes at the district level justify and the beneficiaries prefer them. This could include doors, windows, tiles, roofing etc.
6.7 Training Masons
Master masons should be trained in different building technologies which are relevant locally and in cost reduction methods. Wherever feasible, women mason groups should also be created after adequate training. The list and contact
- 27 -
addresses of such masons and groups should be made available to the beneficiaries.
6.8 Convergence
(i) Toilet
For all IAY houses, construction of toilets under Nirmal Bharat Abhiyan (NBA) is mandatory. The State Governments should put in place a system which facilitates this, covering fund flows, accounting, reporting, etc. It should be ensured that the beneficiary has to approach only one agency for the IAY and NBA components.
(ii) Drinking water
Potable drinking water should be provided to all IAY households by converging the State and Central Government programmes relating to drinking water. Also drinking water wells can be constructed using MGNREGS for an individual house or a group of houses.
(iii) Electricity
Electrification should be provided under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) or any State scheme and in areas where there is no electricity, solar lights should be provided.
(iv) Land development
The lands of individual beneficiaries or habitats may be developed using MGNREGS. The Scheme can also be used for soil conservation and protection, bio-fencing, planting of avenue trees, construction of playgrounds, etc.
(v) Social security
Since IAY beneficiaries are below poverty line, they may be automatically provided benefit of Rastriya Swasthiya Bima Yojana (RSBY) or State Level Health Insurance Scheme in those States where RSBY is not implemented. Life Insurance Corporation runs insurance policies for the poor like Janshree Bima Yojana and Aam Aadmi Bima Yojana. The IAY beneficiaries may be enrolled into one of the schemes as suitable to them.
(vi) Connectivity
- 28 -
Connectivity may be provided in the form of paved pathways, roads or steps using MGNREGS and relevant State schemes.
In order to bring about convergence a state level meeting may be held exclusively for the purpose by the Chief Secretary by January of every year in which all the State level departments/agencies responsible for different schemes may be called and an action plan for convergence prepared to ensure that there is automatic and simultaneous convergence in favour of IAY beneficiaries, as they all belong to families in real need.
6.9 Mobilising additional resources
The amount provided under IAY may not be sufficient in all places for construction of houses with facilities adequate for the family. Therefore, additional resources need to be mobilized as follows:
(i) Supplementary grants from the State Government:
State Governments may provide supplementary grants from their budget as additionality. This is particularly relevant for SCs/STs where funds may be pooled from SCSP and TSP.
(ii) Mobilisation of DRI Loans:
Nationalized Banks have been instructed by the RBI to provide loans upto Rs.20,000/- per house at an interest rate of 4% per annum under the Differential Rate of Interest (DRI) Scheme to SC/ST beneficiaries. To ensure its implementation, the following methodology is suggested:-
(a) Hold a meeting of State Level Bankers Committees (SLBC) to discuss the scheme and take collective decision on modalities;
(b) Assign responsibilities to the DLBC as per district level targets;
(c) At the district level, bank-wise targets may be finalized according to their service area;
(d) Once the beneficiary selection is finalized, in the initial meeting of the beneficiaries, applications for DRI loan should be collected and submitted in the bank branch concerned. A functionary may be assigned the task of following up these applications.
- 29 -
(e) Monitoring of the sanction of DRI loans should be done at the block, district and state levels including at BLBC/DLBC/SLBC levels. At the district and state level, a senior officer should be made responsible for responding to grievances related to non-sanction of DRI loans and sort them out in consultation with the banks concerned.
(iii) Mobilisation of other loans
States may also arrange loans from banks, including cooperative banks to IAY beneficiaries, to supplement the grant assistance, in a schematic manner. The maximum amount of such loan could be Rs.50,000/- and the rate of interest could be subsidized on prompt payment. Detailed guidelines may be issued after working out the scheme in consultation with the banks and cooperatives. Wherever such loans are provided, the beneficiaries have to be sensitized on repayment requirements and their willingness obtained.
(iv) Formulation of subsidy-linked projects availing loans from banks/financial institutions:
State Governments are free to formulate projects which would provide subsidy using IAY funds (within the amount permissible), linked to assured loans from banks including cooperative banks or financial institutions like HUDCO. For coordinating implementation, the States could use the services of organizations of repute and meet their service charges from the provision for administrative expenses and if they are not sufficient, from state funds. Such special projects need the prior approval of the Empowered Committee.
****
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