Finance panel gives, Budget takes away

Finance panel gives, Budget takes away

The Centre may have given a bounty to states by the way of 14th Finance Commission awards but the fineprint in the Budget suggests that the states woes are still far from over.

Also, the Budget has been very harsh two particular schemes – Backward Region Grant Fund (BRGF) and Rashtriya Krishi Bima Yojana (RKVY). In a dissent note, Abhijit Sen, a member of 14th Finance Commsiion, has asked the Centre be a bit kind. While, the Budget has already wound up one scheme, the grant has been pruned to half in the other.

“Some states, and specially some backward districts, could be hit if the Backward Regional Grant Fund is wound up as part of pruning plan transfers consequent to our award,” Sen had written in the dissent note in the Finance Commission report, which was made public last week.

Similarly, he had said that the country will be “ill served” if RKVY is pruned excessively.His worst fears have come true in the Budget which has pruned RKVY by close to half from Rs 8,444 crore in the revised estimates of last year to Rs 4,500 crore this year. The other scheme (BRGF) for backward states has been wound up completely.

Some completely wound up schemes include a scheme for strengthening of panchayats, a scheme for the modernisation of police forces, and the National e-Governance Plan.

The Finance Bill 2015 does not say in as many words that the scheme has been wound up but indicates that the states will have to take care of such schemes by themselves for which there is no allocation from the Centre.

The Budget which claims to have implemented the 14th Finance Commssion awards in letter and spirit, has overlooked another of the commission’s recommendation which spoke against special grants to states. Election-bound Bihar and West Bengal have liberally been given special grants.

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