Indira Awas Yojana was launched in 1985 by Rajiv Gandhi, the Prime Minister of India, as one of the major flagship programs of the Ministry of Rural Development to construct houses for the Below Poverty Line population in the villages.

Sanitary latrine and smokeless Chullah are required to be constructed along with each IAY house for which additional financial assistance is provided from "Total Sanitation Campaign" and "Rajiv Gandhi Grameen Vidyutikaran Yojana" ( Which is now subsumed by Deen Dayal Upadhaya Gram Jyoti Yojana ) respectively.

From 1995 to 1996 the scheme has been further extended to widows or next-of-kin of defense personnel killed in action, ex-servicemen and retired members of the paramilitary forces who wish to live in rural areas as long as they meet basic eligibility criteria.

[10][11] The broad purpose of the scheme is to provide financial assistance to some of the weakest sections of society for them to upgrade or construct the house of respectable quality for their personal living.

[18] The PM Awas Yojana Gramin New Application 2024 has introduced significant changes to enhance accessibility and efficiency in the housing scheme.

Key updates include expanded eligibility criteria, allowing families with assets like bikes or fridges to qualify, and an increased income limit for beneficiaries from ₹10,00,000 to ₹15,00,000 per year.

A new survey process aims to identify previously excluded families, emphasizing inclusivity for marginalized groups.

Additionally, the scheme will focus on direct bank transfers to ensure timely financial assistance, which has been raised to ₹12,00,000 for home construction, disbursed in multiple installments.