The Telegraph
Since 1st March, 1999
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PC package fails to impress states

New Delhi/Guwahati, July 8: Belying expectations of a big hike in the budget of the ministry for development of the northeastern region (Doner), finance minister P. Chidambaram today pegged the outlay for 2004-05 just marginally above the allocation for the last fiscal.

The Rs 1192.7 crore earmarked for development of the region did not enthuse many, given the fact that a windfall was expected with Doner being upgraded from a department to a ministry recently. The outlay for 2003-04 was Rs 1,069 crore.

The Doner ministry had sent an estimate of approximately Rs 2,000 crore to the Planning Commission, proposing a major increase in the allocation for the North Eastern Council (NEC). The finance minister earmarked Rs 550 crore for the region’s apex development agency.

Of the total allocation for the Northeast, Rs 650 crore will come from the non-lapsable pool of resources, which is a corpus of unutilised funds from previous years.

Chidambaram proposed to make it “mandatory” for all ministries and departments to reserve at least 10 per cent of their allocations — amounting to Rs 5,823 crore — for execution of schemes in the Northeast.

The Federation of Industries and Commerce of the Northeastern Region (Finer) said the finance minister had repeated previous policy statements instead of focusing on the need to reduce unemployment and create a level playing field in respect of infrastructure development. “Bottlenecks in respect of the Northeast industrial policy continue (to exist),” Finer said.

The North Eastern Development Finance Corporation Ltd (NEDFi)’s chairman-cum-managing director J.P. Saikia said there was nothing special for the region in Chidambaram’s budget and the states would have to make do with the existing resources and schemes.

“The stress is on rural development and we should try to make the best use of the fund of Rs 25,000 crore for backward states during the next five years,” he said in Guwahati.

The North East Chamber of Commerce and Industry echoed the NEDFi chief. It hoped the governments of the region would play a more proactive role and derive the maximum benefit out of the schemes that had been announced, instead of brooding and doing nothing, as in the past.

The organisation said the Assam government, especially, should immediately ensure representation in the Backward States’ Grants Commission and focus on increasing its share of the divisible pool of central taxes, which has been increased substantially to Rs 82,227 crore this fiscal.

Meghalaya chief minister D.D. Lapang had met Prime Minister Manmohan Singh yesterday and apprised him of the need for increased allocation from the non-lapsable pool.

After the budget was presented, Lapang said Rs 650 crore was “nominal” because the seven states of the region and Sikkim would have to share it. “There should have been more from the pool. The minimum allotment should be Rs 2,000 crore,” he said, emerging from a meeting with World Bank officials at New Delhi’s Meghalaya House.

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