The Telegraph
Monday , March 25 , 2013
Since 1st March, 1999
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Plan size cut for central funds

Patna, March 24: Sluggish growth of Indian economy and slow funds flow from the Centre cast its shadow on the state’s plan size, prompting its downward revision.

The state plan size for the current financial year has been trimmed by around 10 per cent. From Rs 28,000 crore, it has been scaled down to Rs 25,200 crore.

“Recently a high-level meeting was convened to assess the flow of central funds to the state. Given the fact that the funds flow was less than what was projected at the beginning of the financial year, it was decided to downsize the plan,” a senior government official closely associated with the plan formulation process today told The Telegraph.

He clarified that revision of plan size was normal.

At the time of the formulation of the annual plan document, the state had expected a little over Rs 7,000 crore from central funds. But the actual flow turned out to be less.

Deputy chief minister Sushil Kumar Modi said: “The Centre had planned to give Rs 805 crore under the Accelerated Irrigation Development Project during 2012-13 but the actual flow till now has been Rs 51 crore. Same is the case with Jawaharlal Nehru National Urban Renewal Mission under which the Centre has sanctioned just Rs 143 crore against its plan of providing Rs 551 crore under this head.”

Modi disputed the Centre’s claims that non-submission of utilisation certificates and failure to submit detailed project reports were responsible for lower allocation of central funds under the JNNURM. “These are alibis,” he said.

Under the Backward Region Grants Fund, the state has got about Rs 807 crore against the Centre’s plan of giving Rs 1,500 crore.

Modi, also the finance minister of the state, said: “I have nothing against the Centre if it makes concomitant cuts under different heads taking into account the ground realities of the country’s economy, but a mechanism should be developed to keep backward states insulated from its impact.”

Economist N.K. Choudhary said the Centre should try to have a system in place to safeguard the interests of backward states like Bihar during the sluggish growth of the national economy.

Economist and member secretary of Asian Development Research Institute Shaibal Gupta said: “The condition of Bihar in terms of its under-development is akin to a patient having been put in the intensive care unit. The Centre should not compromise on the front of funds allocation.”