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Down to Earth - - BUDGET -

def­i­nite mes­sage that Union Fi­nance Min­is­ter Arun Jait­ley HE MOST gave out in bud­get 2015-16 was that the Cen­tre will share funds for devel­op­ment schemes with states, but the au­ton­omy which states have been de­mand­ing for decades will come at a cost. The bud­get, as well as the de­ci­sions taken by the Na­tional Demo­cratic Al­liance in the run up, show that the Cen­tre is will­ing to fund states if they are ready to take re­spon­si­bil­ity for im­ple­ment­ing schemes ef­fec­tively.

It is pour­ing money for states. Just days be­fore the bud­get, the gov­ern­ment ac­cepted the 14th Fi­nance Com­mis­sion rec­om­men­da­tion that awarded 42 per cent of the Cen­tral tax pool to states, an in­crease of 10 per cent from the cur­rent share. This means states will get 5.24 lakh crore in 2015-16. An ad­di­tional 3.04 lakh

` ` crore will be given to states through grants and plan trans­fer (see ‘States at cen­tre’).

But with money comes re­spon­si­bil­i­ties. The Cen­tre has de­cided to re­tain sup­port for pro­grammes that are a na­tional pri­or­ity, such as poverty al­le­vi­a­tion, while giv­ing states the re­spon­si­bil­ity to im­ple­ment oth­ers with yet-to-be-fi­nalised bud­get-shar­ing mech­a­nism.

The Cen­tral gov­ern­ment will stop fund­ing eight pro­grammes, in­clud­ing the Back­ward Re­gion Grant Funds in op­er­a­tion in 250 dis­tricts and the Na­tional Mission on Food Pro­cess­ing. It will sup­port 31 Centrally-spon­sored schemes while 24 will be im­ple­mented with states bear­ing more costs. Un­der this new mech­a­nism, pro­grammes such as the Na­tional Ru­ral Drink­ing Wa­ter Pro­gramme and Swachh Bharat Ab­hiyan will be funded by the Cen­tre and pro­grammes such as the Ma­hatma Gandhi Na­tional Ru­ral Em­ploy­ment Guar­an­tee Scheme (mgnregs) will con­tinue to get full Cen­tral as­sis­tance.

This change in stance of the Cen­tre was re­flected in Prime Min­is­ter Naren­dra Modi’s re­cent let­ter to chief min­is­ters in which he said: “In this over­all con­text, when you are flush with re­sources, I would like you to have a fresh look at some of the erst­while schemes and pro­grammes sup­ported by the Cen­tre. States are free to con­tinue or change th­ese schemes and pro­grammes as per their dis­cre­tion and re­quire­ment.”

But will the states be able to han­dle this del­uge of re­sources? They may be re­joic­ing at this wind­fall, but their worry starts from here. With mas­sive funds, states need to ur­gently set up the in­sti­tu­tional mech­a­nism to man­age this re­spon­si­bil­ity. They have been grap­pling with un­spent bud­get al­lo­ca­tions for var­i­ous so­cial sec­tor pro­grammes. One of the rea­sons for this is the ab­sence of ca­pac­ity at the states’ level to im­ple­ment pro­grammes. As cur­rently most devel­op­ment pro­grammes are routed through the pan­chay­ats, states need to in­crease in­sti­tu­tional ca­pac­ity of the lo­cal bod­ies in a big way. States and pan­chay­ats con­tinue to fight each other over de­layed

Cen­tral gov­ern­ment share

9,19,842 CR

States' share

5,23,958 CR

In­dus­try rep­re­sen­ta­tives lis­ten­ing to the bud­get speech in Delhi on Fe­bru­ary 28

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