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Devolution up, but aid to Central schemes cut

BS Bureau

The total resources transferred to states and Union territories, inclusive of the states' share of small savings, has gone up to Rs 1517.66 billion in the budget estimate for 2001-02, an increase of 11.3 per cent over Rs 1363.51 billion in the budget estimate for the current year.

The revised estimate for the current year has been placed at Rs 1330.14 billion, 2.4 per cent lower than the budget estimate.

The states will get Rs 616.18 billion in the next fiscal from the Central taxes and duties, an increase of nearly 14 per cent over the budget estimate of Rs 540.80 billion for the current year.

But, in the current fiscal, the states' kitty will be short of the Eleventh Finance Commission's award by Rs 16.62 billion, a fact reflected in the difference between the budget estimate and revised estimate for the current year.

This is primarily because the commission had earmarked Rs 21.22 billion this fiscal for an incentive fund to be released to the states for fiscal reform, for which none of the states qualified.

As the incentive fund has two parts, of which the part meant to cover the states' deficit on non-plan revenue account, amounting to Rs 15.23 billion, has been withheld as the states have not undertaken the prescribed fiscal restructuring. Non-plan grants and loans to states have gone up to Rs 191.27 billion in the budgetary estimate for the next fiscal as against Rs 167.27 billion in the revised estimates for the current year.

While Central assistance for states' and Union territories' plans has been raised from Rs 346.23 billion in the revised estimate for the current year to Rs 376.40 billion in the budgetary estimate for 2001-02, assistance for Central and centrally sponsored schemes is set to go down from Rs 97.59 billion in the current year to Rs 81.91 billion in the next fiscal.

The 16 per cent reduction in the assistance for Central and centrally sponsored schemes can be attributed to the low absorptive capacities of the states, which have been able to utilise only Rs 89.02 billion from the allocation in the current year.

The states' share in small savings collections has gone up by 12.5 per cent to Rs 360 billion in the budget estimates for the next year, from the budgetary allocation of Rs 320 billion this year.

The revised estimates for the current year have been placed at Rs 317.99 billion.

Source: Business Standard

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