The objective of IAY is primarily to help construction of dwelling units by members of Scheduled Castes and also Non-Scheduled Castes rural poor living below the poverty line. From the year 1999-2000, it has been decided to earmark 80% to total allocated funds for construction of new houses and 20% funds for up gradation of Kachha unserviceable houses. As per guidelines, tallest 60% of assistance should go in favors of Scheduled Castes beneficiaries under these schemes.

The target group for houses under I.A.Y. is people below poverty line living in rural areas belonging to S.C./S.T. freed bonded laborers and non SC/ST categories . a maximum of 40% of the total I.A.Y. allocation during a financial year can be utilized for construction of dwelling units for non SCs/STs BPL at categories.

The Gram Sabha will select the beneficiaries’ form the list of eligible house holds. they have complete freedom as to the manner of construction of the house .no contractor is to be engaged for construction of the houses under I.A.Y. ceiling on construction assistance under I.A.Y. is Rs.35,000 /-per unit for plane areas and rs.37,000 /- for hilly difficult areas .sanitary latrines and smokeless chullahs are an integral part of the I.A.Y. houses .

Under I.A.Y. the Gram Sabha is empowered to select the beneficiaries under the scheme. whether the allotment of the dwelling units should be in the name of the female member of the house hold , alternatively it can be allocated in the name of both husband and wife .