The Ministry of Urban Development and Ministry of Rural Development have the overall responsibility to build houses in urban and rural areas of the country.

As housing is a State subject, the role of the Central Govt. is confined to policy making, laying down guidelines and assistance in the form of loans etc.

The actual implementation of the housing schemes is the responsibility of the State Govts.

The following are the measures taken by the Govt. to solve the problem of housing:


1. Institutional Finance for Housing:

To facilitate the construction of houses, several financial institutions have been established by the Govt. to provide housing finance. In the co-operating sector. House building co-operative societies has been set up to provide housing finance. LIC was the only public financial institution to provide housing finance to the policy holders till 1970.

The Central Govt. instituted Housing and Urban Development Corporation (HUDCO) which gives loans for housing to State Housing Boards, Municipal Corporations, and Development authorities. Housing Development Finance Corporation (HDFC) was established in the private sector to provide housing finance in 1977. The RBI has been allocating yearly a specific amount to commercial Bank funds for housing finance since 1981. National Housing Bank (NHB) was established for housing finance in July 1988.

2. Village Housing Scheme:


Village Housing Scheme was introduced in 1957. It provided assistance to villages for construction and improvement of houses in rural areas. The scheme also aims to allocate house sites to landless agricultural workers.

Loan assistance up to Rs. 2000 per house was to be given for improvement of the house. The scheme could not make much progress as it was given low priority by the States and the machinery for proper administration of the scheme did not exist.

3. Research and Development:

Besides financial institutions, there are agencies who are engaged in research and development in the field of housing construction activities. These activities are improvement in the traditional construction materials and methods of construction, acceptance of new materials, providing information and technical help to other organisations and to individuals. These institutions are National Building Organisation (NBO) and Central Building Research Institute (CBRI).


4. Rural House-Site-cum-House Construction Scheme:

This scheme was started in 1971. As the name suggests, the scheme proposed to give sites as well as financial and technical assistance for house construction to landless agricultural workers in rural areas. This scheme was made a component of Minimum Needs Programme during the Fifth Plan. By the end of Fifth 5-year Plan 7.7 million sites were given and about 5.6 lakh houses built.

The Ninth Plan estimated that the eligible families under this scheme would be around 14.5 million. Out of these 7.7 million families had already been allotted house sites while remaining 6.8 million families are without sites. So far as assistance for house construction is concerned by the end of 6th Plan only 1.9 million families could be assisted.

5. Indira Awas Yogana (lAY):

This scheme was started in 1985-86 to provide free dwelling units (DU) for the poor in the rural areas belonging to the scheduled castes, scheduled tribes and free bonded labour. The scheme was extended to non SC/ST poor people from 1993-94 and to families of servicemen of armed and paramilitary forces killed in operation from 1995-96. It is a centrally sponsored scheme and hundred percent sub-sidised. The assistance given for house construction is Rs. 20,000 in plain areas and Rs. 22,000 in hilly areas. The implementing agency is DRDA.

6. State Housing Boards:

In various States, the State Housing Boards allocates, plots and construct houses for people belonging to different income groups in urban areas e.g. HUDA (Haryana Urban Development Authority). The allotees make payment on installment basis at Government rates. The houses are built in groups and in a planned manner with all basic and civic amenities like water supply, sewerage, parks, shopping area and roads etc.

7. Valmiki Ambedkar Awas Yojana (VAMBAY):

This programme was launched on 2nd December 2001. The scheme is meant for urban slum dwellers below the poverty line that do not have adequate houses. For construction of dwelling units and community toilets in urban slums the Central Govt. provides 50 percent of the cost and the rest 50 percent is given by the State governments. Central Govt. has given Rs. 211.87 crore for the construction of 1.06 lakh dwelling units and 20817 toilets in urban slums.


In addition to above said measures, the Govt. has taken several fiscal and monetary measures to encourage the private sector to construct houses. Lowering of interest rate for housing loan. Income tax concession over housing loans, rationalisation of rent. Central laws etc. are some of the measures in this regard. The Govt. has declared National Housing Policy m 1988 and 1998 to provide guidelines to solve the housing problem in the country.