The Telegraph
Tuesday , February 18 , 2014
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Hike jolts purse paralysis

- Why poor spender Jharkhand won’t cheer Centre’s aid

Ranchi, Feb. 17: One of the welcome takeaways of Union finance minister P. Chidambaram’s interim budget today, the proposed central assistance to states increasing from Rs 1.36 lakh crore in 2013-14 to Rs 3.38 lakh crore in 2014-15, has Jharkhand’s power corridors worried.

Given its poor track record in utilising central funds, Chidambaram’s announcement of an almost 2.5 times hike in largesse — one of the populist sops in the UPA’s last budget before the Lok Sabha polls — can only increase Jharkhand’s quantum of lapsed money. In the 2013-14 fiscal, the state was entitled to around Rs 5,500 crore in central sector scheme funds, but could utilise only some 35 per cent so far.

Finance secretary A.P. Singh, who said the state’s existing plan size this fiscal was Rs 16,800 crore, including central and state funds, and open market borrowings from financial institutions like World Bank, Asian Development Bank, RBI and Nabard, added that he apprehended the plan size would “reduce” by March 31.

Central funds are disbursed on work allocations. If a state can’t show work, it won’t get money. And money the state was entitled to is distributed among more active states. Jharkhand has faced this time and again, resulting in a vicious cycle of less work and less money.

“It will only be an exercise on paper in a state like Jharkhand. Saddled with lack of political dynamism and direction, a laggard government machinery results in poor utilisation of central funds,” said a secretary of a state department, requesting anonymity.

So far this fiscal, state welfare department could not utilise a single paisa of the Rs 100 crore allocated for uplift of primitive tribal groups (PTG) under Thirteenth Finance Commission.

Of the promised Rs 460 crore under backward region grants fund (BRGF), state panchayati raj department could only utilise some Rs 40 crore.

Under integrated action plan (IAP), a scheme to tame left wing extremism (LWE) in 17 Jharkhand districts with holistic development, of a Rs 510 crore allocation, authorities could utilise only some Rs 170 crore.

Right now, an internal funds rejig is on in the state to limit this damage. So, at least four lax departments that have used very little funds — planning and development, energy, HRD and food and civil supplies — surrendered or transferred between Rs 850 and Rs 900 crore to “performing” departments road construction and rural works department in 2013-14 fiscal.

Still, as the Hemant Soren government sits on its budget session between February 19 and March 7, the exact amount of unutilised funds this fiscal will be clear.

Ranchi-based Developmental economist Ramesh Sharan told The Telegraph these problems were all due to lack of administrative capacity to perform various development tasks.

“There is no commitment from the top that will percolate down various government levels to effectively utilise central funds or for that matter state resources. There are over a lakh of vacancies across various government departments. Authorities also fail to punctually submit utilisation certificates of already released funds,” he said.

“The Centre increasing allocations to states would have normally been cause for cheer,” Sharan, also senior faculty in Ranchi University’s postgraduate department of economics, said. “In Jharkhand, lack of commitment and coordination makes it a source of bafflement. No one knows how to tackle it,” he added.

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