The State government’s decision to apply the brakes on spending is set to derail the execution of Plan projects of local self-government institutions.

The execution of projects, already moving at a snail’s pace with a fund absorption rate of less than 10 per cent till August, will now get further affected. Once the expenditure level goes up in the last quarter of the financial year, the government would cut the Plan allocation and local bodies will have to relinquish major projects owing to funds crunch.

The Plan expenditure schedule laid down by the Planning Board, setting 30 per cent expenditure each in the first two quarters of the current fiscal and 40 per cent in the third quarter, is reported to have gone awry. The State-level Coordination Committee on Decentralisation has asked the Minister for Panchayats to conduct regional review meetings and Collectors to review the Plan process and take steps for raising the expenditure level.

The State government claim that local bodies have got a full year for project implementation after overhauling the Plan project execution process also seems to have fallen on its face. The decentralised planning system that was in vogue was altered on the premise of procedural simplification for expediting the entire process. But the coordination committee meeting on September 25 admitted that procedures for floating tenders and starting civil works delayed project implementation.

The initiative for jacking up the Plan expenditure to 50 per cent by involving the Minister and District Collectors is set to begin by this month end. Official sources told The Hindu here on Thursday that once the financial crisis intensified, the government would stop giving advance payment to beneficiary committees for implementing projects. Advance clearance of the Finance Department may be made imperative for releasing funds for major projects. Oral directions may be issued against releasing funds from the treasury for Plan projects within the next two months itself. In addition to such restrictions, cuts in further allocation of Plan funds are also imminent.

The alleged laxity of local bodies in fund utilisation will make the course easy for the government to impose fresh curbs. In order to secure maximum Central allocation, the government may be forced to artificially jack up the expenditure rate and development will be the major casualty. The situation calls for concerted action, failing which the entire planning process may suffer serious reversals, sources said.

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