New Delhi, Sept. 7: Jairam Ramesh has mooted a proposal that, if accepted, will meet a longstanding demand from the states: to be allowed to divert central rural development funds from one scheme to another according to their requirements.
Ramesh, the Union rural development minister, has suggested to the Planning Commission that the central funds should follow a “flexi funds” route, allowing the states to decide their priorities and spend accordingly.
Central funds now come under specific schemes along with rigid guidelines that prohibit any inter-scheme diversions.
A full Planning Commission meeting headed by the Prime Minister will decide on the proposal on September 15, when the allocation for the 12th Plan period (2012-17) will be finalised.
If the proposal is accepted, each state will be able to decide how much from the central funds should be spent on specific areas such as road construction, rural employment, rural housing, old-age pension or drinking water.
For example, Kerala wants to divert money given under the Pradhan Mantri Gram Sadak Yojana to livelihood programmes for rural women. Punjab, faced with a shortage of workers under the rural job guarantee scheme, wants to spend some of the money to build houses for the rural poor.
“The idea is that priorities vary from state to state. We want the states to have full freedom in deciding their priorities and spend the money accordingly,” Ramesh told The Telegraph.
Ramesh has discussed the issue with the Prime Minister and the Planning Commission and wrote to the chief ministers in April about this proposal. “The chief ministers have supported the idea. The Planning Commission is also supportive,” Ramesh said.
To start with, 10 per cent of the rural development budget may be earmarked “flexi funds” in the first year of the 12th Plan. This slice will gradually increase to 100 per cent in five years.
National Advisory Council member N.C. Saxena agreed the idea “sounded good” but cautioned that it might lead to more corruption. “Once you allow the ‘flexi funds’ route, you need to have a better supervision and evaluation mechanism,” he said.
Ramesh said his ministry proposes to put in place a stronger monitoring mechanism by starting concurrent evaluation of government schemes through independent agencies.
Unlike the CAG audit, which is a post-mortem exercise, concurrent evaluation is an assessment of a scheme’s impact, strength and weaknesses while it is being implemented. Its objective is to identify problems and bottlenecks and suggest immediate remedies so that the government can intervene and sort out issues.
Ramesh said his ministry expected an allocation of around Rs 500 crore in the 12th Plan.