Fund allocation and use mismatch has been a hotly debated topic, with States demanding greater flexibility in spending to cater to their specific needs.
In response, the Ministry of Rural Development (MoRD) and Planning Commission have put the ball in the State Governments’ court by announcing plans to set up a Rs 40,000-crore flexi-fund for schemes related to rural development.
The fund will be available as an additional amount, over and above the allocations made for individual schemes for all States, to be used for either existing Central schemes or on new projects proposed by the States.
Rural Development Minister Jairam Ramesh said this was one of the major demands of the States.
Flexible component
Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, added that MoRD has some very specific proposals such as including a flexible component in all the schemes, and these will go to the Cabinet for approval.
He added that currently they are looking at restructuring the flagship schemes of various ministries, such that the overall guidelines can be modified to fit the States’ needs.
Ahluwalia also said that a portion of the funds allocated for these flagship schemes will be available to the States independent of the guidelines. These changes are likely to become applicable in a year.