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LATEST NEWS UPDATES | Centre plans flexifund rural schemes-Subodh Ghildiyal

Centre plans flexifund rural schemes-Subodh Ghildiyal

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published Published on Apr 24, 2012   modified Modified on Apr 24, 2012

The government is thinking of letting the states cherry pick the central schemes for rural welfare, a step back from centralized decision-making that it hopes could help quell the accusations that Centre was weakening the federal structure.

The idea behind the 'flexifund route' is to allow states the freedom to decide rural development schemes they want to implement and how much of allocation should each get. It would mark a departure from the present method of every scheme being implemented in every state.

Chief ministers have long sought flexibility in spending and implementation modalities of RD schemes, arguing that Centre's 'one size fits all' approach ignored state-specific needs. Hill states and those with desert pockets have often resented the stress on population-based approach since they are sparsely populated despite having a large surface area.

The dry states have a preference for schemes on water while they are redundant for states with good rainfall. South India stands at a different level of rural development against their northern counterparts.

If Planning Commission accepts the proposal mooted by RD minister Jairam Ramesh, the states would decide the money to be spent in different schemes out of the total rural budget allocated to them.

Pitching for the new approach, Ramesh wrote to plan panel deputy chairman Montek Singh Ahluwalia, "Such a measure could also, in one stroke, send a powerful signal about the UPA government's deep commitment to cooperative federalism."

The new approach is proposed to start as a pilot project in 25% districts of each state with a complete transition in four years.

As per the proposal, RD budget for all schemes in the select 25% districts would be pooled together "to start with a clean slate". The state and district administration, along with panchayat representatives, would draw up an annual plan deciding which scheme required how much focus in that district. The plan would fix an outcome target on each targeted front.

To determine the efficacy of the new approach, the outcome of rural schemes in 25% districts can be compared with the rest.

An alternative in executing the 'flexifund' approach is that states frame guidelines as per local needs to implement RD schemes. It is also to be done in a phased manner, starting with two schemes while the other schemes are implemented as per the existing method. Their performance would be compared later to assess the difference.

The Times of India, 24 April, 2012, http://timesofindia.indiatimes.com/india/Centre-plans-flexifund-rural-schemes/articleshow/12844627.cms


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