Telangana housing scheme: Cost overruns push beneficiaries into debt despite ₹5 lakh aid
Under the Telangana government's Indiramma Indlu scheme, which provides ₹5 lakh in financial assistance for house construction, several beneficiaries have had to spend beyond the subsidy, dipping into savings or taking loans. Rising construction material costs and higher labour charges have pushed expenses above the sanctioned amount, according to beneficiaries and officials.
G. Suraj (name changed), a resident of Sangareddy district, was among those whose dream of owning a house materialised through the scheme. However, completing his house required an additional ₹5 lakh over the government subsidy. Construction stretched over nine months as prices of cement, steel, sand and other materials increased steadily. A shortage of masons and workers, who took up other projects, compounded the delay. He finally held his housewarming ceremony this year.
His experience is not isolated. Several beneficiaries across the State have had to use their savings or take hand loans to complete their homes. Beneficiaries attribute the extra spending to two main factors: rising costs of construction materials, particularly bricks and sand, and increasing charges for masons and labourers. Some also pointed to delays in receiving subsidy instalments and masons taking on multiple projects simultaneously.
Officials of the Telangana Housing Corporation Limited (TGHCL) highlight another factor: the size of the house. The scheme envisages houses of 400 square feet, but some beneficiaries extend slab projections beyond permissible limits. Additional spending on tiles, tapware, woodwork and costlier materials can substantially increase the total cost. This concern grows as the scheme expands. Unless costs are contained, more beneficiaries from economically weaker backgrounds could be forced to exhaust their savings, incur debt, or face prolonged delays.
The scheme was launched by Chief Minister A. Revanth Reddy in March 2024 in Bhadradri Kothagudem, offering a 100% subsidy of ₹5 lakh to poor, houseless families for building houses. The first phase aimed at 4.5 lakh houses, with 3,500 houses per Assembly constituency. Only those who owned land but lacked a house were considered in Phase I.
The subsidy was to be released in four instalments. However, beneficiaries had to spend ₹1 lakh on laying the foundation before becoming eligible for the first instalment. For many, arranging this initial amount itself has been a challenge.
Last month, Housing and Revenue Minister Ponguleti Srinivasa Reddy said housewarming ceremonies were held for 1.35 lakh houses constructed under Phase I, while slabs had been laid for another 1.25 lakh houses. The State government launched Phase II on June 1 this year, planning to allot 2.5 lakh houses. The Minister said people living in huts would be given first priority.
Housing Department Secretary and TGHCL Managing Director V.P. Gautham said applications have been received and selection of beneficiaries is underway, with officials conducting field verification. However, the ₹1 lakh requirement for laying the foundation remains a concern, particularly for Phase II, which targets some of the State's poorest families. According to sources, some applicants living in huts have expressed inability to arrange the money. “Some of them are already in debt. We are looking at options to help them generate the money. They definitely cannot afford to spend any amount over the ₹5 lakh subsidy,” sources said.
The Housing Corporation has been aware of the problem of beneficiaries borrowing money to complete their houses. Officials note that shear wall technology could help keep construction costs within ₹5 lakh, but it has not yet gained widespread acceptance. As the scheme progresses, addressing these structural issues will be crucial to ensuring that the intended beneficiaries can complete their homes without falling into debt.
