In a stern message to State governments, the Urban Development Ministry wants no “diversion or misuse” of funds that are meant to fix urban infrastructure.
The Ministry sent a circular to States last week asking them to ensure that the 14 Finance Commission grants are only spent on developing a network of sanitation, water supply, solid and liquid waste management, storm water drains, roads, footpaths, street lights and burial and cremation sites.
Speaking to The Hindu , Aishwar Rao, the Ministry spokesperson, said that the aim is to “move forward in a focussed manner.”
“Earlier, the States had this habit to divert funds to other development projects like building a flyover while ignoring the basic infrastructure like drainage and solid and liquid waste disposal,” said Mr. Rao.
Utilisation reportsThe Ministry has also asked States to submit utilisation reports for 2015-16 by June end, and in addition, develop “advance” annual action plans for the coming year.
“That way we will be able to see the spending behaviour of the States,” he said adding that from next year onward, the Ministry will allot money to Urban Local Bodies (ULBs) according to their annual action plans.
Rajiv Gauba, Secretary (Urban Development), in his communication to the States, asked States to ensure transfer of Finance Commission grants to the Urban Local Bodies within 15 days after receiving them from the Centre.
PenaltyIn case of delays, the Ministry would slap “bank rate of interest.” A similar interest rate will be imposed on States in case they cross the deadlines for the submission of annual utilisation reports.
Mr.Gauba urged State governments to ensure effective monitoring of utilisation of grants at the level of Chief Secretaries besides coexisting evaluation by third party.
In a threefold increase over that of the 13th Finance Commission, the 14th Finance Commission awarded total grants of Rs.87,144 Crores to ULBs as Basic Grant (80%) and Performance Grant (20%).
