The Telegraph
Since 1st March, 1999
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Freeze on new development projects

Calcutta, Dec. 17: Industry minister Nirupam Sen, who is also chairman of the state planning board, told ministers at Writers’ Buildings today that no new development project would be sanctioned in the next plan due to the government’s crippling financial crunch.

Sen is holding meetings with the ministers everyday this week to prepare a “realistic plan outlay for 2003-04”.

The planning board chairman today suggested a nearly-75 per cent cut in the plan allocations and asked the ministers to be satisfied with the bare minimum necessary to keep the ongoing development projects alive.

He told them that next year’s plan outlay would be made “more realistic” by pruning it to Rs 513 crore from the Rs 1,980 crore outlay for this financial year.

Angry ministers demanded an explanation on why they were not informed about the budget slash before they spent the “matching grants” from the Centre on their departmental projects.

The ministers, who met Sen for a clue to the plan allocations for their departments next year, said they received the Central assistance on the basis of the finance department’s “written” assurance that it will release the state’s share of the funds. “But now, in the last quarter of the financial year, we are told that the state’s share will not be available. We have already spent a good part of the Central funds and are in a fix about submitting the utilisation certificates to the Centre in the absence of the state’s matching grants. It is a kind of fraud that we committed to get Central assistance by submitting false assurances,” said an agitated minister.

What has complicated matters for some departments is that their salary expenditure is also met from the plan allocations.

The agriculture directorate, for instance, pays salary to the teachers and staff in its two agriculture universities from the plan allocations. If more than 75 per cent is slashed from the allocated funds for the two institutions, the directorate would have to walk a tight rope to meet its salary commitments.

Most government departments are striving to mobilise resources to pay salary to employees.

Finance minister Asim Dasgupta had blamed the Centre for the state’s sudden bankruptcy.

Expenditure on salary and pension for 10 lakh employees doubled following the revision in pay packets in 1999, he said. Moreover, the Central loan burden has doubled as the Union government now charges 12 per cent interest on borrowings.

However, not many ministers are ready to accept Sen and Dasgupta’s arguments while estimating plan outlays.

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