With hardly three days left in the current financial year, the row over fund absorption and execution of Plan projects of local self-government institutions is remaining unresolved.

The Cabinet decision to relax the deadline for expending 40 per cent of the carryover funds in the next financial year is unlikely to benefit the majority of civic bodies.

The State-level Coordination Committee on Decentralised Planning which met here on Monday reported that till March 23, except the 152 block panchayats which registered a 69 per cent utilisation rate, 978 grama panchayats could spend only 44.97 per cent, 60 municipalities 37 per cent, and the five corporations just 30 per cent of the funds at their disposal.

Official sources told The Hindu here that as in the previous year, bunching of at least 50 per cent of expenditure at the fag end of the year had thus become imperative.


The government clarification that the deadline relaxation would be applicable only to the civic bodies which had made use of 60 per cent funds would be yet another compulsion to raise the expenditure level through ritualistic practices.

This was mostly applicable in the case of the corporations which had an alarmingly low utilisation rate. Expending the remaining funds to reach the desirable level would be an arduous task for them.

The civic bodies complain that the last tranche of the Plan funds were released only on Thursday. This is being cited as a culpable lapse of the government.

Civic representatives and project implementing officials were unable to draw the sanctioned funds as the government had not issued any directive to the treasury officials.

The government order relaxing the deadline for expenditure would also be issued only on Monday. The shortfall had not been fixed. The decision to extend the deadline was likely to invite the flak of the Accountant-General. This was being pointed out as a bad financial practice which was likely to lead to financial indiscipline, the sources said.

The thorough changes made in the planning and implementation systems without taking adequate safeguards had derailed the entire process.

Owing to the delay in finalising the subsidy norms and frequent changes in Plan preparation guidelines, the majority of the civic bodies could finalise their Plan projects only by mid-March.

This included the projects in the farm sector that should be implemented in June-July among others.

The decision to do away with the Expert Committees and appropriate the powers of the District Planning Committees also debilitated the vetting and clearing process, the sources said.