Local bodies heading for financial crisis in Kerala

December 27, 2014 09:24 am | Updated 09:24 am IST - THIRUVANANTHAPURAM:

Local Self-Government Institutions (LSGIs) are reportedly heading for yet another financial crisis as they will be deprived of around Rs.312 crore under the Special Component Plan and Tribal Sub-Plan (SCP/TSP) in the next financial year.

A State Planning Board meeting held here on December 16 has decided against enhancing the outlay under these heads for 2015-16 on the presumption that ‘‘the increase of 12 per cent SCP/TSP will lead to a situation where the departments may get lesser amounts compared to the previous year.”

At present, the SCP/TSP allocation is fixed by providing 12 per cent more than the funds provided in the previous year, assuming that the Plan size has been growing over the years. The proposal was mooted by Planning Board Vice Chairman K.M. Chandrasekhar at a meeting chaired by Local Self-Government Department Principal Secretary James Varghese.

The Planning Department sources told The Hindu here that the allocation for the current year under these heads was about Rs.2,595.09 crore and on granting a 12 per cent increase, it would have been around Rs.2,907.06 crore in the next financial year.

But the decision that the outlay need remain the same as in the current year will in effect deprive the LSGIs of funds worth around Rs.312 crore for initiating welfare activities for the deprived sections.

The general sector fund may also be lesser in size. While the State Plan size is consistently growing, the LSGIs’ Plan is set for a major cut. The criteria for apportioning funds for development purposes were laid by the Fourth State Finance Commission and it had been specified that a preferential treatment should be given to the marginalised sections, considering their state of deprivation. Bettering the lot of such sections may suffer a setback in the face of the current decision. The premise that enhancement of SCP/TSP would affect the allocation to departments too had found to be untenable in the face of the poor Plan fund absorption rate of the departments in the current year itself, sources said.

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