For hilly and Naxal-affected areas, the Ministry has proposed that the grants for constructing houses under the scheme should go up from Rs 48,500 crore to Rs 80,000, sources said.
The outlay for IAY in 2012-2013 was Rs 11,000 crore and target was 32 lakh houses for BPL families.
Rural Development Minister Jairam Ramesh had once admitted that that IAY is the worst implemented programme in his Ministry and steps would be made to "clean up" the programme. IAY has been in operation since 1985-1986.
He is also of the view that the pace of implementation of IAY in states is required to improve very substantially.
Meanwhile, official sources said huge unspent balance was lying with various state governments including Bihar, Gujarat, Karnataka, West Bengal, Odisha, Assam and Uttar Pradesh.
