Annual Report 2003-2004

Budget 2004-05: Broad Strategies and Provisions for Housing

Committed to strike a fine balance among the three mutually reinforcing objectives of growth, stability and equity, the budget has been guided by the seven major economic policies of the National Common Minimum Programme outlined below:

· maintaining a growth rate of 7 - 8 per cent per year for a sustained period;
· providing universal access to quality basic education and health;
· generating gainful employment in agriculture, manufacturing and services, and promoting investment;
· assuring 100 days’ employment to the breadwinner in each family at the minimum wage;
· focusing on agriculture and infrastructure;
· accelerating fiscal consolidation and reform; and
· ensuring higher and more efficient fiscal devolution.

The Hon’ble Finance Minister while announcing the Union Budget re-iterated the Government’s commitment to the housing sector in our country, rural housing in particular. The Hon’ble Finance Minister expressed the need to give a fresh stimulus to the GJRHFS. With the objective of making the scheme more affordable to larger section of rural population, he announced that the National Housing Bank will provide additional concession of 25 bps on refinance to be provided under the scheme. He further announced that the Reserve Bank of India has agreed to revise the norms of re-payment for rural housing loans by banks, so that the repayment instalments coincide with crop cycles. This is intended to facilitate repayments by borrowers in rural areas with loan repayments coinciding with harvest seasons. Allocation for ‘Indira Awas Yojana’ for the year 2004-05 has also been increased to Rs. 2247 crore as against the allocation of Rs.1710 crore for the previous year. Besides, the Finance Minister mentioned that one of the major impediments coming in the way of flow of institutional credit towards rural housing is creation of security in view of non-availability of documents establishing clear title to non agricultural land in rural areas. He announced the initiation of measures to find a solution for this problem. This is expected to increase the demand for rural housing finance as well as to reduce the risk perceptions of the lending institutions.