Government decision to deduct unused Plan funds from general allocation

The State government decision to deduct the shortfall in expending the Tribal Sub-Plan (TSP) and Special Component Plan (SCP) funds during 2010-11 from the funds apportioned for the general sector in the current year is feared to affect the project execution process of local bodies.

The resolution to deduct the shortfall from the general sector is understood to have been taken after a series of high-level discussions. Frequent changes in the project guidelines will necessitate a revisit to the projects prepared by local bodies and this will derail the execution schedule too.

As per norms, if the TSP and SCP funds absorption rate in a given year is below the mandatory limit, the unspent quantum will be deducted from the allocation in the subsequent years. This was a rider introduced by the third State Finance Commission to ensure optimum utilisation of funds apportioned for the marginalised sections.

The decision has been explained away as part of a routine arrangement done in the previous years too. After expending SCP and TSP funds for the general sector, it will be adjusted in due course from the funds earmarked for the general sector in the subsequent years.

The utilisation rate of TSP funds had always been a matter of dispute. In the wake of complaints that local bodies could expend only a meagre component of the funds allocated under this head, officials claim that the rules have been eased to ensure optimum utilisation in the current year.

Local bodies are at liberty to take up imaginative projects for bettering the lot of such sections. Funds can be used to improve sanitation, medical and educational facilities, development of anganwadis, and infrastructure facilities. But lack of imaginative and feasible projects has been cited as one of the main reason for poor absorption rate. Lapses in project preparation affect the absorption rate too.

The government decision to do away with the system in force for clearing the projects for the weaker sections has also come in for criticism. Earlier, the projects for such sections were cleared by an official who was well aware of the living conditions of the backward classes and tribes. The working group too had a specific say in the implementation process. On entrusting the approval with officials who were relatively unaware of the living conditions of such sections, the projects taken up in this sector were unlikely to prove useful to the real beneficiaries, sources said.

The Fourth State Finance Commission had recommended a preferential treatment for the weaker sections and laid provisions to ensure that they are getting their due in the Plan fund allocation.