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LATEST NEWS UPDATES | Fund squeeze for flagship schemes

Fund squeeze for flagship schemes

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published Published on Mar 1, 2011   modified Modified on Mar 1, 2011
For most schemes, the increases have been nominal

The Union Budget goes eloquent about the virtues of the flagship schemes of the UPA government but Finance Minister Pranab Mukherjee has kept a tight fist while allocating funds, whether for the National Rural Employment Guarantee Scheme (NREGS) or those under the umbrella of Bharat Nirman.

Though the finance minister referred to wages under the 100-day employment programme having being increased after being indexed to the Consumer Price Index, he did not mention the fact the allocation had been kept unchanged at Rs 40,000 crore. In fact, it has been reduced by Rs 100 crore as compared to last year.
This is despite the fact the rural development ministry has demanded Rs 65,000 crore owing to the wage revision. The fund squeeze has appalled activists.

Nikhil De of Mazdoor Kisan Shakti Sangathan said he was shocked at the allocation. “How can that be explained, given the higher wages and the increase in the cost of materials?” he asked.

“An artificial shortage of funds was being created in the states as far as NREGS was concerned. There has been demand for funds from many states though these haven’t been fulfilled by the Centre this year,” said Abhay Singh, an activist from Karnataka where the scheme remained paralysed for most of last year.

With NREGS spending being limited to Rs 23,000 crore this year against an allocation of Rs 40,100 crore, Pawan Kumar, National Secretary, Bharatiya Mazdoor Sangh, pointed out the government had been exposed as it was violating its own laws guaranteeing work on demand. This is proving to be a supply-driven scheme, which was being kept undernourished as far as funds are concerned,” he said.

This status quo in allocation comes in the wake of allegations of poor implementation and charges of widespread corruption in the scheme. NREGS spending has remained around 50-60 per cent and the average number of working days had been just 35 this year.

As far as the the Bharat Nirman set of schemes was concerned, the Budget announces an increase of Rs 10,000 crore in allocation. However, for most schemes, the increases have been nominal and it can be termed high only when compared to Budget estimates of last year.

The total allocation has been increased to Rs 58,000 crore, which the Budget says is an increase of Rs 10,000 crore.

Indira Awas Yojana, funded mostly from the National Investment Fund (money from disinvestment of PSUs) will get almost the same as last year. The allocation stays at Rs 8,996 crore, of which Rs 8,448 comes from the NIF.

Pradhan Mantri Grameen Sadak Yojana, the rural-road scheme, got Rs 19,886 crore in the revised estimates last year. The same has been reduced to Rs 18,217 crore this year. However, it is Rs 8,000 crore more from last year’s allocation.

Either the status quo has been maintained or there has been a decline in the allocation for rural electrification, rural telephony, and rural irrigation.

The funds for rural electrification have risen from Rs 4,429 crore (revised estimate) to Rs 5,326 crore. Rural telephony funds have declined from Rs 3,100 (revised estimate) to Rs 2,100 crore.

However for rural telephony, the Budget makes provision for rural broadband connectivity to all 2,50,000 panchayats in the coming three years.

Rural drinking water programme allocations have gone up from Rs 9,512 crore (revised estimate) to Rs 9,900 crore.

The allocations for Bharat Nirman and NREGS only reflect the general trend towards all social sector schemes, whether it is the National Rural Livelihood Mission, the Skill Development Mission or the initiatives announced for dry land farmers.

The National Rural Livelihood Mission to empower self-help groups around the country through credit and training, has been left with the same allocation as last year.

The Business Standard, 1 March, 2011, http://www.business-standard.com/india/news/fund-squeeze-for-flagship-schemes/426899/


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