A combination of factors, including delay in mandatory approvals and policy changes of the new government, has reportedly had an impact on the Plan expenditure of local governments.
Of the total outlay of ₹5,500 crore, local governments could so far expend only ₹639 crore, a meagre 11.63 per cent. Now they are facing the ordeal of ensuring optimum utilisation of the funds at their disposal within three months.
They have to adapt to the People’s Plan Campaign mode revived by the Left Democratic Front government and also complete preparations for the 13th Five Year Plan.
Demonetisation impact
Also, demonetisation of high value currency notes has deprived them of the financial capacity to complete ongoing projects and take up fresh ones within the available time.
Project preparation and implementation schedules in local bodies went astray due to factors such as the Assembly elections and policy changes of the new government, which were beyond the control of elected members.
Well before the new governing committees of local bodies settled down, they had to get actively involved in the Assembly elections and on returning to business, again there was a shift in policy. The LDF government decided to relaunch the People’s Plan Campaign shelved by the previous government. This also led to the formation of new guidelines and reconstitution of the DPCs. Once again the DPCs became the secretariat of district development and the local governments had to rework their development plans too.
Mandatory clearances from the district administration too were delayed. All these are reported to have a direct bearing on the spending of local governments.
Demonetisation has virtually left the coffers of local bodies empty. Their tax revenue has dried up and the curbs on withdrawal has further depleted their capacity to shore up Plan spending, sources said.
The weekly Plan monitoring system in vogue would be changed and a daily scrutiny would be introduced from February. This is expected to improve the expenditure levels, but currency shortage is feared to upset the plan of action, sources said.
