The Haryana government has demanded that centrally sponsored schemes (CSS) be dismantled; devolution of funds be done leaving space for local initiatives; premium for efficient and fast-growing States; 15 per cent increase in Annual Plan allocation for 2015-16 and 2016-17 over 2013-14; and an end to the ritual of Annual Plan approval. These demands were made by Haryana Chief Minister Manohar Lal Khattar at the meeting of the Governing Council of Niti Aayog in New Delhi.
Speaking at the meeting, chaired by Prime Minister Narendra Modi, Mr Khattar suggested dismantling of the centrally sponsored schemes (CSS) in the next two years and allocation of the earmarked funds to States as
flexi-funds for achieving sectoral targets. “As you are aware, the Union Budget allocates about 59 per cent of the central plan funds as central plan assistance to States and the balance funds are allocated in the form of CSS. The straight-jacketed conditionalities of the CSS do not allow any flexibility to meet local needs which results in states either conforming to a uniform eligibility and strategic posture, or losing out on resource allocation”, the Chief Minister pointed out.
Devolution of funds should be made on the basis of a formula other than the one proposed by Gadgil-Mukherjee, and States should be given greater liberty in opting for strategies to achieve the national goals within the given time-frame and central plan assistance (CPA) put on automatic route to achieve the national goals, he added.
Mr.Khattar said the Niti Aayog must also recognise that States are not homogenous and should allow them to collectively deliberate upon the subjects on the agenda of the Aayog and do the groundwork for defining the national goals, the sectoral targets and the achievable indicators. The Chief Minister suggested that the States must be allowed greater flexibility to raise funds from the market to finance infrastructure projects. “A method for mopping up market resources is to allow designated State entities to issue tax-free bonds to finance infrastructure projects”, he said.
Insisting that the ritual of annual plan approval may be discontinued, Mr Khattar said: “I am further suggesting that future devolution of the CPA should be on a formula different from the Gadgil-Mukherjee formula. The present classification of public expenditure into plan and non- plan expenditure also needs to be modified”, he added.
“For calculating the annual allocation under the Plan for the years 2015-16 and 2016-17, I would propose a 15 per cent annual increase on the base year allocation of 2013-14”, he said. In education and health sectors, he said, the ‘education for all’ and ‘health for all’ programmes are national priorities and so funding for these should be assured for a time perspective longer than a Five-Year Plan keeping in view the likely time to achieve the goals.
“For other sectors of the economy, I would suggest that a programme-based approach be adopted. Every State must set capital investment targets keeping in view development requirements and the goals to be achieved”, he added. Mr Khattar also sought greater financial support for the National Capital Region saying the three States constituting the NCR outside the limits of Delhi cannot create desirable infrastructure facilities with own funds.