Govt for Rs 40k cr rural fund

Govt for Rs 40k cr rural fund

The Centre has proposed to set up a flexi-fund of Rs 40,000 crore in the 12th Five Year Plan to give the State Governments more flexibility in implementation of rural development schemes and to ensure better targeting of projects.

The Union Government has also proposed to gradually do away with the distinction between ‘Above Poverty Line’ and ‘Below Poverty Line’ to target the beneficiaries of rural development schemes, beginning with the housing programme Indira Awas Yojana in 2013-14.

“The rural development schemes today are prisoners of national guidelines. For the first time, we are making a significant departure and putting together a flexi-fund that will be available to all states to spend on rural development scheme,” Rural Development Minister Jairam Ramesh said. “This would ensure better targeting and focusing of projects on state-specific priorities.”

Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the Rural Development Flexi-Fund was expected to be operational from next year.

The proposed flexi-fund would be available as an additional amount that could be spent either on existing Centrally Sponsored Schemes of the Ministry of Rural Development or the Ministry of Drinking Water and Sanitation or on new projects proposed by the respective states. Ramesh said that it would ‘incentivise’ innovation in service delivery, building sustainable rural infrastructure, greening of rural development and devolution to and empowerment to panchayat raj institutions. “With these provisions, the RDF would be available for use under any centrally-sponsored scheme and even for work not currently covered under any of the scheme,” he added.

The Centre’s proposal comes after prolonged clamour by the State Governments for more flexibility in guidelines for implementation of the rural development schemes. A recent review of the rural development schemes revealed that about Rs 7,700 crore of the total allocation for the PMGSY in the Budget Estimate for the current financial year might have to be surrendered due to tardy implementation of the programme.