More than half of money for rural development remains unspent

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 ₹ 30,846 crore to states in the first six months of the year, or 42% of the ₹ 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.

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 ₹ 40,000 crore this fiscal and had an opening balance of ₹ 15,000 crore. Out of the total ₹ 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 ₹ 33,915 crore in October compared with ₹ 24,000 crore in April. The unspent balance under the rural jobs scheme is at around ₹ 19,000 crore, Pradhan Mantri Gram Sadak Yojana at ₹ 8,000 crore and Indira Awas Yojana at ₹ 5,300 crore.

Meanwhile, the ministry has now set an expenditure target of ₹ 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