New Delhi/Thrissur: A short walk away from the small rain-lashed panchayat office in the village of Cherpu, K. Kalyani, a 52-year-old agricultural labourer awaits Rs50,000 from panchayat (local administration) officials to build a home of her own.
Around a month back, Kalyani finished laying the foundation for a 500 sq. ft house, in a 1,306 sq. ft plot set amid paddy fields. She paid for this through small thrift deposit schemes and borrowings. Now, she is waiting for the rains to end before she can claim the money officials have borrowed on her behalf, to resume work on her house.
Kalyani is among some 150 people in this village who will finally have houses of their own, thanks to a housing scheme—the EMS Housing Scheme, named after the state’s first Communist chief minister E.M.S. Namboodiripad—launched by the Kerala government last year, where urban and rural local bodies borrow from banks and then lend to families living below the poverty line.
The state hopes to build homes for some 550,000 below poverty line (BPL) families.
In Delhi, Union housing ministry authorities hard-pressed to close a 24-million-unit housing gap—almost all of it among the low-income groups—are watching the Kerala experiment closely. A senior official at the ministry of housing and poverty alleviation said the model was interesting and, if it worked, could be replicated across India.
The official also said the ministry is working on a couple of models looking to get the private sector to invest in low-cost housing.
The loans given by panchayats in Kerala will range from Rs50,000-1,00,000 per beneficiary and the state government will pay a portion of the interest from the local bodies’ share of state revenues, local government officials said.
Thrissur in central Kerala is the only district that has currently initiated this programme with village panchayats, such as the one in Cherpu borrowing from cooperative banks to build houses for the poor. Some 150 families in Cherpu panchayat alone will get houses under the scheme, with a total loan amount of Rs75 lakh.
Kerala finance minister Thomas Isaac said housing schemes such as these would fuel business and the Union government should look at using the National Rural Employment Guarantee Scheme for such projects, since it involves the BPL category and will also provide jobs to the poor.
The houses would typically be owned by the local administrative body till the loan is paid, with the government paying half the interest and the recipient paying the other half, said T. K. Jose, secretary in the local self government department of the state government.
M. Ramanunny, general manager of the District Co-operative Bank, Thrissur, said: “Already 7,105 people in 51 village panchayats in the district have signed agreements. The total amount allocated under the scheme is Rs35.35 crore.”
In all housing loans, a good part of the initial repayment is towards the interest component. Since the state has offered to pay the interest, the bank has in the agreement made a provision whereby during the last disbursement of the loan amount, the interest portion would be withheld and once the state pays the loan amount, it would be returned to the beneficiary with interest. Taking a cue from Thrissur, other panchayats are in talks with the cooperative societies and scheduled banks to raise funds. M.P. Varghese, president of Mazhuvannur panchayat in Ernakulam district and chairman of the Association of Ernakulam District Panchayat Presidents, said agreements will be signed soon with district cooperative banks.