Ministries seek higher allocation for Centrally sponsored schemes

Ministries seek higher allocation for Centrally sponsored schemes
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First Published: Thu, Feb 12 2009. 11 35 PM IST

Funds scramble: Workers dig a pond as part of the National Rural Employment Guarantee Scheme in a village in Uttar Pradesh. With the general election due by May, this year’s budget will be an interim
Funds scramble: Workers dig a pond as part of the National Rural Employment Guarantee Scheme in a village in Uttar Pradesh. With the general election due by May, this year’s budget will be an interim
Updated: Fri, Feb 13 2009. 09 44 AM IST
New Delhi: Their ministers may not know whether their coalition will form the next government but that hasn’t stopped several ministries from asking for 50-100% more money than they were allotted last year to fund their programmes in 2009-10.
These programmes, run by the Union government, include schemes such as the Accelerated Irrigation Benefit Programme, or AIBP, and the Jawaharlal Nehru Urban Renewal Mission, or JNNURM. Ministries pitch for money with the Planning Commission—the country’s apex planning agency—that then recommends their cause and suggests a number to the finance ministry.
To be sure, such requests are made every year and recognized in the budget which allocates money to each ministry. This year’s requests, however, are unusual because the general election is due by May and the budget will be an interim one, with the government likely to choose to present basic accounts and have them voted on. However, the ruling Congress-led United Progressive Alliance government has also indicated that the interim budget will focus on its flagship development schemes.
Funds scramble: Workers dig a pond as part of the National Rural Employment Guarantee Scheme in a village in Uttar Pradesh. With the general election due by May, this year’s budget will be an interim one. Harikrishna Katragadda / Mint
Among the ministries asking for more money is the water resources department that has sought Rs15,000 crore for AIBP in 2009-10, 100% more than the money allocated to it in 2008-09. The Planning Commission has recommended that Rs10,000 crore be allocated for AIBP.
“The Planning Commission is of the opinion that not more than Rs10,000 crore should be allocated under AIBP as there is paucity of funds. Depending on the new government and its priorities, the amount will be finalized,” said a senior Planning Commission official, who did not want to be identified.
In 2008-09, while Rs5,550 crore was granted to AIBP in the budget, an additional Rs2,300 crore was added during the supplementary budget.
Supplementary budgets, which are passed during the course of the fiscal year, usually enhance allocations depending upon the performance of Central schemes.
AIBP was created in 1996-97 to cover 200 irrigation projects. It was later linked to Bharat Nirman, the UPA’s ambitious project for creating rural infrastructure, and its scope was extended.
Like the water resources ministry, the ministry of urban development and the ministry of urban poverty alleviation— the two are jointly in charge of JNNURM— have asked for an increase of 54% from last year.
“The ministries have asked for Rs17,054 crore. Let’s see what the Planning Commission recommends,” said a second Planning Commission official who, too, did not want to be identified. He added the ministry of urban development wants to utilize a large portion of the second stimulus package of Rs20,000 crore given by the government in January, and which mentions an increased spending through JNNURM, for creating urban infrastructure.
JNNURM was launched in December 2005 with an outlay of Rs50,000 crore to be spent over a seven-year period.
One economist said there is no rationale behind ministries seeking more money for their programmes when their focus should be on making these more effective.
“I don’t understand the justification for asking for such high allocations. Either there should be cost escalation in implementing or the programme is expanding to justify this. What is required here is that the money that is allocated is spent effectively and honestly, besides reaching the people they are targeted for,” said S.L. Rao, economist and chairman of the Bangalore-based think tank Institute for Social and Economic Change.
Rao cited the example of the National Rural Employment Guarantee Scheme, which was expanded to cover the whole country last year. “But leakages in the scheme are so high that higher allocations are not reaching the targeted people.”
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First Published: Thu, Feb 12 2009. 11 35 PM IST