The state has been forced to reduce its plan size for the 2011-12 fiscal, thanks to factors well beyond its control.

The government had fixed a plan size of Rs 24,000 crore for this fiscal, but it has now been downsized to Rs 21,390 crore. “A proposal in this regard has already been submitted to the Planning Commission and a formal approval for the same is expected soon,” a senior state government officer told The Telepgaph on Tuesday preferring anonymity.

The Telegraph had on March 5 carried a report on possible downsizing of the state’s plan size for the current fiscal. The approval of the Planning Commission for fixing plan size of any state is a must because the panel verifies if the claims made by the state about likely flow of central funds was correct. The commission also verifies if the state concerned was adhering to the provisions of Fiscal Responsibility and Budget Management (FRBM) Act, which insists on keeping fiscal deficit of states within the stipulated limit as a fixed percentage of GSDP of the state concerned.

Giving reasons for downsizing the plan size, the officer said while Jharkhand failed to give Rs 2,000 crore, supposed to be provided by it, to Bihar according to the terms of division of assets and liabilities between the two states after the bifurcation of the erstwhile Bihar. “The Centre also provided about Rs. 700 crore less than the expected funds under normal central assistance, leading to pruning of plan size,” he added.

The officer claimed that revising plan size towards the end of a financial year was a normal phenomenon as at the beginning of plan size is fixed on certain assumptions on the funds flow front. His assertion appears logical as the downsizing of annual plan is not taking place for the first time, rather it has been a regular feature in the past few years.

The stand of the officer notwithstanding, the “below expectation” funds flow is bound to affect the pace of development work in many departments. Downsizing of plan size directly hits development work because funds earmarked under this head are used for fresh projects. Non-plan funds are used to meet recurring expenses.

Some of the key departments that would be hit because of the downsizing of the plan are energy, urban development, panchayati raj, water resources and health and industry. Taken together, these departments would get more than Rs. 2500 crore less than what was expected for them, a source said.

The source, however, made it clear that denial of funds would not affect much as far as the ongoing projects were concerned. “Agencies keep on working, but the pace of work becomes a little sluggish for a few days as fresh funds are provided once funds flow begins with the commencement of the next fiscal,” the source said, adding that it would hit the projects that were in pipeline.

Citing example he said in case of the urban development department, most projects that would be adversely hit were related to Jawaharlal Nehru Urban Renewal Mission and implementation of the projects would have been started only after getting central funds for the same.

Amid this exercise, the state is also keeping a tab on expenditure of various depart-ments to ensure that cent per cent of the revised plan size fund was used before the end of this fiscal on March 31.