CRITERIA FOR ALLOCATION AND RELEASE OF FUNDS



4.1     Criteria for Allocation of Resources :

 Central assistance under the Indira Awaas Yojana will be allocated among the States/UTs giving 75% weightage to rural housing shortage as per Census data and 25% weightage to poverty ratio.  Similarly, inter-district’s allocation within a State/UT will be made by giving 75% weightage to housing shortage and 25% weightage to rural SC/ST population of the concerned districts.  The targets for the Blocks within a District and Village Panchayats within the Blocks will be decided on the same principles.  Diversion of resources from one district to another is strictly prohibited.  Upto 20% of the total funds can be utilized for upgradation of existing kutcha houses and towards subsidy for construction of houses with credit in accordance with Para 3.1 and 3.4.1

4.2     Release of Central Assistance to Zilla Parishads/DRDAs :

 The Indira Awaas Yojana funds are operated by the Zilla Parishads/DRDAs at the district level. Central assistance will be released every year to the Zilla Parishads/DRDAs, in two instalments, subject to the fulfilment of the following conditions: -

(a)    The first instalment amounting to 50% of the total allocation for a particular district is released in the beginning of the financial year. This is subject to condition that the second instalment during previous year was claimed and released without any condition. However, if any specific conditions had been imposed at the time of release of the last instalment of the previous year, its compliance will have to be ensured before release of the first instalment.

 

 

1 Vide Ministry’s order No.H-11027/1/2004-RH dt. 01/07/2005

 

(b)     The second instalment for the districts will be released on receipt of request from the DRDAs as per Proforma at Annexure - I on fulfilment of the following conditions: -

 

(i)     60% of the total available funds, that is opening balance of the year (in case of proposal for the first instalment, opening balance of the previous year) plus the amount received including the State share (if the State share has not been released against the first instalment, notional State share will be taken into account for the purpose of calculation of total availability) and other receipts should have been utilized at the time of submitting the proposal for the second instalment.

(ii)    The opening balance of the District should not exceed 10% 1 of the funds available during the previous year.  In case, the opening balance exceeds this limit, the Central share of the excess will be deducted proportionately at the time of release of the second instalment.

 

(iii)    The State Government has made sufficient provision in their Budget to match the Central financial assistance.

 

(iv)   The State Government should have released all its contribution (including that of the previous years) due, up to the date of the application.  In the event of shortfall in State share, corresponding amount of Central share (i.e. three times the shortfall of State share) will be deducted from the amount of Central share of the second instalment of the current year.

 

 

 

 

1 Vide Ministry’s order No.H-11011/6/2004-RH(P) dt. 05/08/2005

 

(v)        Submission of Audit Reports for the IAY for the last year and submission of Action Taken Report on the comments made in the audit report of the previous year.  The Audit Report should consist of Bank Reconciliation Statement and a Certificate from the Chartered Accountant that while auditing the district account of the IAY, the accounts of all Implementing Agencies such as block-wise expenditure etc have been taken into account. Where funds are released to the beneficiaries through blocks, block-wise expenditure statement duly countersigned by Chartered Accountant should be enclosed with the Audit Report.  Where funds are released through Gram Panchayat without going through the blocks, the expenditure should be compiled at block level and block-wise expenditure statement duly countersigned by the Chartered Accountant, should be submitted.  In that case, the Auditor will also certify that the block-wise expenditure statement is based on the UCs received from the Gram Panchayats.  However, where funds are released to the beneficiaries directly by the DRDA, block-wise expenditure statement is not required.  In that case, the Auditor will certify that the funds have been released to the beneficiaries directly by the DRDA1.

 

(vi)       Submission of Utilization Certificates of cash component from DRDAs based on reports received from the other Implementing Agencies such as Block Development Office etc. for the previous year should be submitted in the prescribed Proforma as per Annexure -  II.

 

(vii)      Submission of non-diversion and non-embezzlement certificate.

 

1Vide Ministry’s Order No. J-12024/1/2008-RH(A/c) dated 28.8.2008.

(viii)  Annual Plan should have been approved by the Zilla Parishad or the Governing Body of the DRDA as the case may be.

 

(ix)   All pending progress/monitoring reports should have been sent.

 

(x)    Any other condition imposed from time to time will also have to be complied with.

 

(xi)   All documents must be checked/enclosed with the proposal as per the Checklist.  (Annexure – III)

 

(c)     In the case of districts/UTs having limited working season or any peculiar problem such as Kinnaur, Lahaul and Spiti, Leh, Kargil, Andaman and Nicobar Islands and Lakshadweep and any other areas as decided, the entire Central assistance may be released in one instalment. The State shall also release its share in one instalment. In the case of these districts, to which funds are released in one instalment, funds will be released on fulfilment of the following conditions:

                         (i)                at least 60% of the total available funds, i.e. opening balance of the previous year plus the amount received during the previous year including the State share, wherever applicable (if the State share has not been released, notional State share will be taken into account for the purpose of calculation of total availability) and other receipts, if any, should have been utilized at the time of submitting the proposal for lump sum release of funds.  Utilization Certificate in form GFR 19-A should be furnished in this regard.

 

(ii)      Audit Report for the IAY for the year previous to last year, should be submitted along with the proposal.  The Audit Report should consist of Bank Reconciliation Statement and Block-wise Expenditure Statement or a certificate from the Chartered Accountant, in lieu thereof, that the funds are being transferred to the beneficiaries directly from the DRDA.

 

(iii)    Utilization Certificates of cash component from DRDAs based on reports received from the other Implementing Agencies such as Block Development Office etc. for the year previous to last year should be submitted in the prescribed proforma as per Annexure-II.

 

(iv)     All other conditions stated in Para 4.2 (b) will be applicable.1

 

4.3        Cuts to be imposed on late receipt of proposals:

 

4.3.1     The proposal for release of second installment by the Zilla Parishad/DRDA complete in all respects should be submitted latest by 31st December every year.

 

4.3.2       To maintain financial discipline, a mandatory deduction (s) on account of late submission of proposal by the State Government shall be imposed depending upon the date of receipt of complete proposal for release of second installment under IAY. Under the system, there will be progressive deductions for proposal (s) received in the month of January and February @ 10% and 20% respectively on the total Central allocation for the year. Incomplete proposals will not be accepted. The date on which last information is received from the State shall be treated as date of receipt of the proposal.

 

4.3.3    Notwithstanding the above provision (Para 4.3.2), State should submit the proposal for the second installment before 15th February every year. 

 

1 Vide Ministry’s order No.H-11011/6/2004-RH(P) dt. 04/12 /2008.

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Acceptance of proposal(s) after 15th February upto 28th February will be considered only in exceptional circumstances.  Proposals will not be accepted after February. However, if the proposal received in the month of March is accepted under special circumstances, 30% cut in the allocation will be imposed.

 

4.3.4  Zilla Parishads/DRDAs are required to complete all the incomplete houses sanctioned/taken up in the previous years first (with  the funds  available during  the current year)  even  if  there is a deduction while releasing the 2nd installment in the previous year due to unavoidable circumstances. The targets fixed at the time of allocation of funds to the districts/states during the current year would be adjusted accordingly keeping in view the deduction/additional release, if any, during the previous year. 

4.4        Earmarking of Resources under the IAY:

 

4.4.1   5% of the total allocated funds under IAY will be kept apart to meet the exigencies arising out of natural calamities and other emergent situations like riot, arson, fire, rehabilitation under exceptional circumstances etc with a district-wise ceiling of 10% of annual allocation (including State share) or Rs.70.00 lakh whichever is higher.1

 

Proposals for this purpose have to come from State Governments/Admn. of UTs showing the extent of damage and the estimated fund requirement in respect of the proposed IAY houses provided  assistance for construction of a house has not been obtained from any other source.    The upper limit shall be 10% of the district’s annual allocation or Rs.70.00 lakh, whichever is higher.  However, this will be within the overall ceiling of 5% funds kept apart for natural calamities.  The relief will be as per the norms with regard to per unit ceiling of assistance for an IAY house prescribed under the scheme.1

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1 Vide Ministry’s orders No.H-11011/6/2004-RH(P) dt. 18/08/2008.

              In order to facilitate timely relief to victims in the case of fire, riots and arson and enable immediate reconstruction of damaged houses, District Collectors/District Magistrates/ Deputy Commissioners at the district level are authorized to first incur the expenditure and extend assistance to victims of such calamities.  The expenditure may be from their own resources or from the district’s IAY allocation.  The ceiling of assistance to the beneficiaries will be as per IAY norms and the limits mentioned in the above para.  The central share of the expenditure so incurred by the DRDA will be reimbursed by the Ministry of Rural Development.  The DRDA will submit the proposal for reimbursement of central share along with details of families assisted and Utilization Certificate for the amount spent, duly signed by the Collectors.  The Collector will also certify the occurrence & extent of the damage and also provide a certificate to the effect that no assistance for construction of house has been extended to the said victims of fire/riots/arson from any other source.  The Ministry of Rural Development will meet such reimbursement expenditure from the 5% IAY funds earmarked for calamities.1

4.4.2          The unutilized amount, if any, of this provision of 5% of the funds of the scheme, will be utilized for allocation to the better performing States/Districts.  The Ministry of Home Affairs or any other Ministry/Department handling the natural calamity or other emergent situation will also be informed about the allocation of these funds, in order to avoid any duplication in relief work. Physical and financial progress reports of the funds so spent have to be furnished by the State Governments concerned on the work done within the provision of the allocation made for these contingencies.

 

 

 

              1 Vide Ministry’s orders No.H-11011/6/2004-RH(P) dt. 18/08/2008

 

4.5     Maintenance of Accounts:

Zilla Parishads/DRDAs will follow the accounting procedures prescribed by the Ministry of Rural Development. The finalized accounts of the previous year shall be got approved by the General Body of the concerned DRDA on or before 30th June and got audited on or before 31st August of the same year. Copies of the Audit Report as accepted by the General Body of the concerned DRDA shall be sent to the State Government and Central Government on or before 30th September of the year. The above procedure will be in addition to any other procedures to be followed and requirements to be fulfilled by the DRDA as per the Articles of Memorandum of the Association.

 

4.6     Release of State share to DRDAs :

The State Government shall release its share to the Zilla Parishads/DRDAs within one month after the release of Central assistance and copy of the same should be endorsed to Ministry of Rural Development.

 

4.7     Separate Bank Account for the Indira Awaas Yojana :

The lAY funds (Central share as well as State share) shall be kept in a nationalized/scheduled or cooperative bank or a Post Office in an exclusive and separate savings bank account by the DRDAs.

 

4.8     Utilization of Interest Earned on Deposits :

The interest amount accrued on the deposits of the lAY funds shall be treated as part of the lAY resources.

 

4.9     Drawal of funds by the DRDAs :

Drawal of funds from the accounts shall only be made for incurring expenditure under the lAY.

 

4.10   Payment to beneficiaries:

Payment should be made to the beneficiary on a staggered basis depending on the progress of the work. The entire money should not be paid to the beneficiary in lump sum.   Installments of payment to be linked to the progress of work can be decided by the State Government or at the District level.

            Funds under IAY should be transferred only directly into the beneficiaries’ accounts in a bank or post office.  For this purpose, as soon as the beneficiaries are selected, they should be asked to open a Bank/Post Office account, in case they do not already have an account in any Bank or Post Office, and to intimate the account number to the Gram Panchayat/BDO/DRDA, as the case may be.1

 

                1 Vide Ministry’s order No.J-11012/1/06-RH(P) dt. 27/05/2008

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