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LATEST NEWS UPDATES | Budget 2014: Political move? UPA shifts power over huge spending to states

Budget 2014: Political move? UPA shifts power over huge spending to states

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published Published on Feb 18, 2014   modified Modified on Feb 18, 2014
-The Times of India


NEW DELHI: The next government at the Centre will have far less money to play with, thanks to something Chidambaram has done. He has transferred substantial control over spending on centrally-sponsored schemes such as employment guarantee and Sarva Shiksha Abhiyan to the states. In the coming year, the amount is Rs 3.4 lakh crore. State governments will be pleased.

Political observers see it as a move to curry favour with regional parties such as BJD in Orissa. Although the government termed the change as routine, conspiracy theorists believe there's an unstated reason for shifting spending power from the Centre to the states: Should Narendra Modi form the next government, he'll find himself left with only a fraction of the kitty the UPA had access to all these years.

The move will leave little power for Union ministers in the next government who assume charge of key social sector ministries such as rural development, health and human resources development. For instance, the next rural development minister will have just about Rs 7,600 crore to spend with Rs 74,500 crore transferred to states.

The devolution will be a little less at the HRD ministry, as the states will get a little over Rs 50,000 crore out of an allocation of nearly Rs 82,000 crore. Similarly, in health ministry, states will directly receive almost Rs 26,000 crore from the budget allocation of about Rs 38,700 crore.

A ministry like women and child development will have less than Rs 1,000 crore at its disposal while states will get to spend close to Rs 20,000 crore on their own. In case of infrastructure, science and technology and general economic services, plan assistance to central ministries has largely remained unchanged.

Although the next finance minister can reverse the move, it will not be an easy decision with regional parties likely to be key constituents of any coalition at the Centre. Going by opinion poll results, their bargaining power is only going to rise this summer. Already, the regional parties are applauding the decision, although they say it's come a little too late in the day to benefit the Congress significantly.

The UPA has defended the move by pointing out that states such as Bihar, Odisha and Gujarat have been seeking greater autonomy in the implementation of centrally-sponsored schemes.

"The principle of states having a greater say in spending money meant for development has been acknowledged, but the matter has been left to the next government to deal with. It is a belated political ploy to woo states," said CPM leader Sitaram Yechury. "This is a welcome step even if belated. The BJD had been strongly urging the Centre to increase the say that states have in how central grants are spent," added BJD leader Bhartruhari Mahtab.


The Times of India, 18 February, 2014, http://timesofindia.indiatimes.com/business/india-business/Budget-2014-Political-move-UPA-shifts-power-over-huge-spending-to-states/articleshow/30584209.cms


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