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Backward Regions Grant Fund: Gujarat ranks one of lowest in utilising Central funds

By Rajiv Shah
A just-released Planning Commission study, “Evaluation Study of Backward Regions Grant Fund (BRGF)”, prepared by the top Government of India body’s Programme Evaluation Organization, has found that Gujarat has ranked poorly in the utilization of grants made available under the BRGF programme from the Government of India between 2006-07 and 2010-11. The study has found that, during the period under study, Gujarat ranked No 22nd in utilization of allocation made towards BRGF, and No 17th in utilization of the released grants among 27 states which receive the grants. Explaining BRGF, the study says, it is “an area development intervention that is aimed at promoting decentralized planning and development through a yearly untied development and capacity building grants to 250 backward districts across 27 states.”
Gujarat’s districts covered for availing BRGF from the Government of India are – Dang, Dahod, Panchmahal, Banaskantha, Narmada and Sabarkantha. As many as 2,907 village panchayats of 48 backward talukas of these Gujarat districts are recipients of the grant. A Times of India report dated December 14, 2011 had reported that the state government, in a submission to the Planning Commission, had admitted that during the fiscal year 2010-11 Gujarat could spend 39.88 per cent of the grant made available to it by the Government of India in order to bridge critical infrastructure gaps and developmental requirements. The study has been carried out nearly four years after the state government submission, and covers a five year period, providing inter-state comparisons.
The study says, while in the short term, the programme “aims at increasing infrastructural facilities in the backward regions and strengthening the development planning capacity of local institutions”, in the long term, “it aims at reducing overall backwardness of the regions/districts, reducing poverty and improving livelihood conditions in the areas.” It adds, “A majority of the districts chosen for receiving backward areas grant “are heavily populated by the Scheduled Castes (SCs), Scheduled Tribes (STs) and Muslim minorities.” Gujarat has only fewer districts under the programme; most of the districts under the programme are from “erstwhile BIMARU states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh), which now also include the states of Uttarakhand, Chhattisgarh and Jharkhand”, to quote from the study.
During 2006-07 to 2010-11, the study has found, Gujarat was allocated Rs 486.64 crore of BRGF grants, against which it was able to obtain a release of Rs 192.48 crore. As against this, the utilization was just about Rs 39.55 crore, which means that even from the allocated amount a whopping about Rs 153 crore remained unutilized. The best performing state in utilizing the released grant was Punjab with a utilization of 94.06 per cent, followed by Jammu and Kashmir (83.27 per cent), Karnataka (82.40 per cent), Bihar (74.87 per cent), Haryana (70.60 per cent), Uttarakhand (67.42 per cent), Tamil Nadu 55.51 per cent), Madhya Pradesh (46.31 per cent), Maharashtra (43.30 per cent), Himachal Pradesh (38.84 per cent), Assam (37.69 per cent), and Jharkhand (35.25 per cent). Gujarat could spend just 35.24 per cent of the grant it had received from the backward areas funds scheme.
State-wise utilization of grants (2006-11)
What is equally appalling is Gujarat’s performance in the grants given under the BRGF scheme for capacity building – here it ranks No 19th out of 27 states for which the study was carried out. Thus, the Government of India allocation for BRGF capacity building in Gujarat’s backward districts Rs 30 crore, out of which the state government succeeded in obtaining an allocation of Rs 13.37 crore. Even here, the actual utilization was just about 7.93 crore, or 59.31 per cent of the released grant. Here, the best performers were Odisha and Rajasthan, which could utilize 100 per cent of the capacity building grants, followed by West Bengal (97.59 per cent), Tamil Nadu (83.86 per cent), Andhra Pradesh (79.37 per cent), Maharashtra (75 per cent), Himachal Pradesh and Madhya Pradesh (74.09 per cent each), Punjab (72 per cent), Jharkhand (70.50 per cent), Karnataka (68.36 per cent), Haryana (64.63 per cent), and Chhattisarh (63.53 per cent).
Main focus of the Planning Commission study, to quote, is “on examining the implementation status, mainly linked to the financial and physical progress of the programme, the difficulties and challenges of implementation, and the impacts of the programme on the local infrastructure, development of the area, and the socio-economic conditions of the people of the district.” It adds, “The release of allocation of all the states was 64 per cent (during the period 2006-07 to 2009-10), which varied from year to year and across the states. It was 56.18 per cent in 2007-08, 65 per cent in 2008-09, 75 per cent in 2009-10, and 109.62 per cent in 2010-11.”
The study says, “None of the states was able to get more than 80 per cent of the allocation released. Chhattisgarh, Andhra Pradesh, Haryana, Rajasthan, Bihar, and Madhya Pradesh were the leading states in terms of the overall release ratio. The states with the lowest release ratio were Uttarakhand, Jammu and Kashmir, Assam, Gujarat, Punjab, and Maharashtra. The overall utilization (of the total release of funds between 2006-07 and 2010- 11) was merely 35.68 per cent. However, while the release ratio increased over the period under study, the utilization ratio decreased during successive years under evaluation. It was 50.94 per cent in 2007-08, then decreased to 26 per cent in 2008-09, after which it increased to 43.89 per cent in 2009-10, but again declined to 28 per cent in 2010-11.”
Explaining Gujarat’s and other states’ poor release of grants as against allocation, the study says, “Pre-released conditionalities are the main reasons for the low release ratio and subsequently the low utilization ratio.” It adds, “The utilization of the first installment of the previous year is a conditionality for the release of the first installment of the subsequent year. The release was also linked to the approval of the annual action plan by the High Powered Committee (UPC) and subsequently by the Panchayat Raj Ministry at the Centre.” The same is true, the study has suggested, of the release and utilization ratios of the capacity building grants.
Be that as it may, the study has exposed the claim by the Gujarat government around the hype it made around Garib Kalyan Melas, and how they went to benefit the backward regions, where the percentage of the poor is higher than the rest of the state. Under the scheme, each district was provided with a minimum of Rs 10 crore per year, with priority given to creating facilities for education, livelihood, irrigation, dairy, health and sanitation works and woman and child development. Apart from bridging critical gaps in infrastructure, the aim was to reinforce panchayat and municipal level governance and capacity building and skill enhancement of local bodies for planning and implementation.

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