Days before he was wheeled into the operation theatre, Prime Minister Manmohan Singh sent a letter addressed to the chief ministers of all the states, asking them to get their act together with respect to centrally-sponsored schemes, especially in the light of the global financial crisis and impending elections.
The letter was sent in the face of the gaps between targets and achievements in various central schemes, especially those pertaining to rural infrastructure and social security.
Singh asked the CMs to give highest priority to income-generating schemes like housing and tone up implementation of ongoing programmes to enable them to not only spend the originally allocated funds but also the additional Plan allocation of Rs 20,000 crore (Rs 200 billion).
He referred specifically to the additional allocation of Rs 1,900 crore (Rs 19 billion) for the Pradhan Mantri Gram Sadak Yojana and other roads, Rs 4,200 crore (Rs 42 billion) for the Jawahar Lal Nehru National Urban Renewal Mission, Rs 3,500 crore (Rs 35 billion) for the National Rural Employment Guarantee Scheme, Rs 3,050 crore (Rs 30.50 billion) for Indira Awas Yojana, Rs 2,300 crore (Rs 23 billion) for the Acceleration Irrigation Benefit Programme and Rs 1,000 crore (Rs 10 billion) for the National Social Assistance Programme. These allocations are not part of the Rs 20,000 crore (Rs 200 billion) additional Plan expenditure.
'Achievement of the enhanced expenditure envisaged in these programmes depends critically on supportive action at the level of state governments in toning up administration of existing schemes as well as ensuring provision of the states' share of expenditure. Recognising that the states may face revenue shortages, they are being allowed to raise additional market borrowings of 0.5 per cent of their GSDP amounting to a total of about Rs 30,000 crore (Rs 300 billion) for all states for capital expenditure,' he writes.
He adds: 'You may like to quickly firm up your plans for raising and spending this additional amount.'
Dwelling at length on housing and JNNURM as a means to boost to the economic activity, Singh asked the states to come up with new housing schemes to provide a fillip to economic activity while providing affordable shelter. 'You may like to give this matter your highest priority,' the letter added.
The PM called upon the CMs to offer their personal intervention in expediting action on these matters which would 'give a boost to economic activity' at the state level.
Some central government schemes have huge backlog as on December 2008, which formed the context for a worried prime minister's SOS to the chief ministers.
For instance, in the PMGSY, which aims to link villages with all-weather roads under Bharat Nirman, the target of touching 18,100 hamlets fell short by 14,000 villages, with just 25 per cent coverage till December 2008. The amount allocated was Rs 15,780 crore (Rs 157.8 billion), and the expenditure was Rs 8,427 crore (Rs 84.27 billion) by December.
Similarly, the Indira Awas Yojana fund utilisation was less than 60 per cent in Assam, Haryana, Jammu and Kashmir, Maharashtra, Manipur, Orissa, Punjab, Rajasthan, West Bengal and all the Union Territories.
The target for rural housing was 2.1 million before it was revised to 4.3 million houses. The achievement so far is just 50 per cent of the original target of around 1 million. The allocation of Rs 5,400 crore (Rs 54 billion) was revised to Rs 8,800 crore (Rs 88 billion) but the expenditure so far is just Rs 4,330 crore (Rs 43.3 billion), or 60 per cent of the total amount.
In the case of Swarnajayanti Gram Swarojgar Yojana, the expenditure as on December was just 56 per cent of the Rs 2,350 crore (Rs 23.5 billion) allocated.
The National Rural Employment Guarantee Scheme has been found to have failed to respond to the huge injection of funds, with states spending only 64 per cent of the Rs 26,307 crore (Rs 263.07 billion) allocation. The amount itself is much more than the Rs 19,305 crore (Rs 193.05 billion) available to states last year.
The letter was followed by a meeting of the chief secretaries called by the cabinet secretary last week to discuss implementation of economic stimulus measures.
