It may be recalled that during the visit of Mahinda Rajapaksa, President of Sri Lanka, to India in June 2010, the Government of India announced that it would construct 50,000 houses as part of post-conflict rehabilitation efforts. The Project is being implemented as full grant assistance amounting to USD 250 million (approximately SLR 30 billion) from the Government of India, making it one of the largest grant assistance projects ever undertaken by India overseas.

Under the pilot phase of the Project, which was completed in July 2012, the Government of India entrusted an agency to construct 1,000 houses for beneficiaries in the Northern Province. The second phase, launched on the birth anniversary of Mahatma Gandhi on 2 October 2012, aims to construct or repair 45,000 houses in the Northern and Eastern Provinces. An innovative owner-driven model is being pursued to implement the second phase, wherein the Government of India arranges technical support and financial assistance for the owner-beneficiaries to undertake the construction / repair of their houses themselves. Financial assistance of SLR 550,000 per beneficiary (SLR 250,000 in case of repair cases) is released in stages, and transferred directly into the bank accounts of the beneficiaries by the High Commission of India. The project is being implemented in close consultation with the Government of Sri Lanka and other stakeholders, and the highest standards of objectivity and transparency are being followed, both for beneficiary selection and payment mechanism.

With the completion of 26,000 houses under the second phase, 19,000 houses remain to be constructed or repaired under this phase, which is expected to be completed by end-2015.

Separately, preparatory work for the third phase of the Indian Housing Project, which involves construction of 4,000 houses for estate workers in the Central and Uva Provinces, has already commenced, and actual construction is expected to start in mid-2015.