NEW DELHI: The scheme to provide interest subvention to the rural homeless poor has failed to make a mark with weak response to loans and poor utilisation of funds, prompting the government to seek its revival by roping in two financial institutions with strong rural network.

The Rural Housing Interest Subsidy Scheme has managed to spend barely around Rs 10 crore till this week, out of around Rs 50 crore released mid-2019, with roughly 9,000 beneficiaries. It marks a setback for government expectations, evident from the fact that the rural development ministry had earmarked Rs 100 crore for 2020-21. Sources said the current year allocation is redundant now given the abysmal expenditure.

The figures were revealed in a review by the RD ministry last week. The flagship rural housing programme called Pradhan Mantri Awas Yojana (earlier Indira Awas Yojana), which provides financial support to the rural poor for construction of houses, has 2.95 crore beneficiaries identified on the basis of poverty survey Socio-Economic Caste Census. It has a deadline of construction of 2022. In 2017, the Centre launched the RHISS to help the rural poor who are not in the list of identified beneficiaries of PMAY but want to construct a house.

They are helped to avail a loan of Rs 2 lakh with an upfront subvention of Rs 38,859. The National Housing Bank was chosen as the nodal implementation agency. The scheme guidelines were finalised in mid-2017. But with the scheme virtually a non-starter, wellplaced sources said the RD ministry this week decided to add two big institutions Nabard and Hudco as nodal agencies besides the existing NHB.

“The idea is to tap into the rural network of District Central Cooperative Banks and Regional Rural Banks of Nabard while Hudco already works in financing rural housing,” a senior official said, adding, “The NHB has a limited reach and that is evident in the response to the scheme.”

The added leverage of big institutions working in the field of credit in rural sector is expected to overcome a major hurdle in the success of RHISS — the reluctance of banks and lending agencies to provide loans to the poor



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