×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

More than half of money for rural development remains unspent

More than half of money for rural development remains unspent
Comment E-mail Print Share
First Published: Tue, Nov 01 2011. 10 50 PM IST

Slow going: Villagers in Kalahandi, Orissa, dig ditches for a project under the rural job scheme.
Slow going: Villagers in Kalahandi, Orissa, dig ditches for a project under the rural job scheme.
Updated: Tue, Nov 01 2011. 10 50 PM IST
New Delhi: Less than half the funds allocated to the rural development ministry in the current fiscal year for programmes, including the rural job guarantee plan, have been utilized. This is slower than last year, but the government contends tighter monitoring has prevented misuse of funds.
The ministry has released Rs 30,846 crore to states in the first six months of the year, or 42% of the Rs 74,100 crore that has been allocated to it in the year to 31 March, according to data available with the rural development ministry, which released 45% of the total funds in the same period last year.
Slow going: Villagers in Kalahandi, Orissa, dig ditches for a project under the rural job scheme.
“We have released less funds under our schemes to states so far this year compared with most other years. This could be an indication of tighter budgets with fewer leakages being presented by states,” a ministry official said. “Usually states demand more funds initially, which are allotted to them, and then they spend at their own pace.”
Usually, 60% of the funds are released by the first six months of a fiscal, another official said. Both declined to be named.
The ministry of rural development oversees several economic development programmes including Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Pradhan Mantri Gram Sadak Yojana, Indira Awaas Yojana and National Rural Livelihood Mission that are critical to raise income levels in rural India.
Lower expenditure is not necessarily a reflection of poor utilization of funds, according to ministry officials.
“Closer supervision and constant monitoring of schemes by us has actually reduced leakages in the system,” said the official. “So, funds are not being diverted elsewhere or being misused to the extent that they were earlier and hence expenditure patterns appear lower.”
Higher farm wages have also reduced demand for work under the job guarantee plan and resulted in lower spending, the official said. The rural job guarantee programme provides employment only when there is a demand from workers. The ministry’s flagship jobs plan was allocated Rs 40,000 crore this fiscal and had an opening balance of Rs 15,000 crore. Out of the total Rs 55,000 crore available, less than half has been spent so far.
The programme promises 100 days of manual work every year to each rural household. Introduced in February 2006, it has provided employment to 28.4 million households so far this year.
However, only 474.3 million persondays of employment were generated till 31 August this year under the scheme, about half the 929.6 million persondays of work created during the same period a year earlier.
Plugging of leakages cannot be the reason for sluggish spending, said Vinoj Abraham, who teaches at Thiruvananthapuram-based Centre for Development Studies.
“The fact of the matter is that, when the ministry demands a certain budget, it does so keeping in mind foreseen expenditure. It obviously does not account for leakages in that budget,” said Abraham. “So, then when actual expenditure is less than the planned allocation, it just means less is being spent.”
Data also shows that unspent balances have shot up to Rs 33,915 crore in October compared with Rs 24,000 crore in April. The unspent balance under the rural jobs scheme is at around Rs 19,000 crore, Pradhan Mantri Gram Sadak Yojana at Rs 8,000 crore and Indira Awas Yojana at Rs 5,300 crore.
Meanwhile, the ministry has now set an expenditure target of Rs 9,677 crore for the third quarter, excluding MGNREGA, so that the total release up to December this year is able to reach 70%.
No target has been set for the job guarantee scheme since it is based on demand.
ruhi.t@livemint.com
Comment E-mail Print Share
First Published: Tue, Nov 01 2011. 10 50 PM IST