Saturday, April 21, 2012

About Rs 1 lakh crore budget for rural India

Sangita Jha/ New Delhi

There has been a 10 per cent overall jump in allocation of Ministry of Rural development, which was
allocated Rs 90,000 crore in the 2011-12 fiscal.

Next only to Defence as far as Budgetary allocation is concerned, Union Rural Development ministry is now very close to Rs 1 lakh core mark. With Rs 99,000 crore allocation for the financial year 2012-13, Finance Minister Pranab Mukherjee's Budget has clear rural undertone. The ministry known mostly for the Mahatma Gandhi National RuralEmployment Guarantee Act (MGNREGA) is now looking forward to focus on other areas to become a key player in contributing to the growth of the economy.
Union rural development minister Jairam Ramesh did not miss to emphasise that the Budget is a trend setter for the rural India. Though the annual allocation for the next fiscal is Rs 99,000 crore, the Ministry of Rural Development could well surpass the Rs 1 lkah crore mark in the next fiscal only, as move is afoot to bring the Pradhan Mantri Adarsh Gram Yojna under its ambit shortly.
There has been a 10 per cent overall jump in allocation of Ministry of Rural development, which was allocated Rs 90,000 crore in the 2011-12 fiscal. There is a possibility, that the ministry could get another Rs 1,000 crore in November when the revised Budget is made under the head of the rural drinking water plan. With cases of arsenic contamination on the rise particularly in the rural areas where ground water is mostly the source of drinking water, the ministry is keen to change the gear and give a push to provide surface piped drinking water to the rural hamlets.
Though the ministry was allocated Rs 11,000 crore for rural drinking in the ongoing fiscal, the actual expenditure has been Rs 10,000 crore, while the allocation for next fiscal is Rs 14,000 crore. This translates into 40 per cent jump and also stresses the urgency, that the Centre is attaching to clean drinking water.
Finance minister has also allocated Rs 50 crore for setting up of a water testing centre in Kolkata. West Bengal, Odhisa and Jharkhand have seen an alarming rise in cases of arsenic contamination in the recent years. The world class centre in Kolkata, which will come up in the Rajarhat area of the metropolis over three acres of land having been allocated by the state government is expected to mitigate the cases of contamination of ground water and ensure that people get safe water to drink.
Further, allocation for the Pradhan Mantri Gram Sadak Yojna (PMGSY) has also got a boost with an increase of Rs 4,000 crore, as total allocation will substantially go up from Rs 20,000 crore to Rs 24000 crore in 2012-13. The PMGSY is the most sought after flagship scheme of the Centre, with state governments lobbying hard to get enhanced allocation to them for rural connectivity. Minister of Rural Development Ramesh has said that his ministry would focus on states like Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh, Orissa, Assam, West Bengal, which have so far lagged behind under the programme. The norms have been amended by the Ministry for PMGSY in the tribal areas to ensure that even villages with population of 500 and more could get roads built under theflagship scheme.
The Centre had unveiled National Rural Livelihoods Mission (NRLM) last year by giving it the name of Aajivika to give a major push for the people in the rural areas to become not only self-dependent but also engines of economic growth. Mukherjee has proposed in the Budget, that Women's Self Help Groups (SHGs) would get loans at seven per cent, while those who repay on time will have to pay only four per cent. This is significant that India's SHG success story has revolved around those headed by women, who enjoy enviable track record of repaying their loans on time.
The Centre is also looking forward to unveil the urban version of the NRLM in the form of National Urban Livelihoods Mission (NULM) to replicate the success story of the SHGs in the urban areas too.
However, the Finance Minister has cut the allocation for MGNREGA by Rs 7,000 crore, as Rs 33,000 crore has been proposed for the next fiscal. The allocation was Rs 40,000 crore in 2011-12. However, the MGNREGA being a demand driven flagship scheme is to be supported by the grants if there were the need for more funds. Ramesh explained that Budgetary allocation for MGNREGA is only "notional" and added that if the job demand is of more than Rs 33,000 crore the additional funds would be made available. The cut in the allocation appears to have been due to the fact, that the actual expenditure has been much less than the projected labour budgets submitted by the state governments. In fact there has been growing realization that the state governments have been inflating the labour budget for the MGNREGA by seeking funds as if it was their entitlement.Giving examples of West Bengal government, Ramesh said while the state government had projected a labour budget of Rs 3,900 crore the actual expenditure has been only Rs 2,000 crore. Similarly, in the case of Jharkhand the state government had projected a labour budget of Rs 1800 crore but the actual expenditure has been only Rs 1100 crore.
There appears to be a case that the state government's or Gram Panchayat's capacity to spend does not match the labour budget projected by them. However, the Centre can still pitch in with more funds in November when the revised expenditure budget is prepared. However, there appears that the good Monsoon in the recent years has diluted the demands for works under MGNREGA.
However, there appears no dearth of funds, as an amount of Rs 42000 crore for MGNREGA would still be available, which includes an opening balance of Rs 6,000 crore lying with the states and their contribution of Rs 3,000 crore for the programme.
In another significant decision, the Finance Minister has increased the widow pension amount from Rs 200 to Rs 300 and disability pension scheme again from Rs 200 to Rs 300 per month. However, the ministry wants, that the widow pension scheme should also cover those who are 20 years of age unlike the current norms of 40 years of age. There ia also a demand that those with 40 per cent disability be considered entitled for disability pension in place of the current 80 per cent norms.
While the Economic Survey, which was tabled in the Parliament just on the eve of the annual Budget, had raised a question on MGNREGA draining the labour force away from the farms during the peak season, the Ministry of Rural Development is hopeful of the fact with the implementation of the Planning Commission member Mihir Shah headed committee on reforms of the flagship scheme the issue would be addressed. The report, which would be implemented from April 1 this year, has recommended 28 out of 30 new categories of works related to the agricultural sector to be included in the approved lists of works which could be taken up under MGNREGA.

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