Central scheme funds not to bypass state treasury from next year

This would be under a change in policy being planned by the Finance Ministry, Rural Dev Min Jairam Ramesh

Central schemes in which Centre sends funds to the districts directly through implementing societies or through District Rural Development Authority DRDA would have to send funds to the State consolidated fund from next year. This would be under a change in policy being planned by the Finance Ministry, Rural Development Minister Jairam Ramesh said today.

The minister said in the context of Indira Awas Yojana implemented by his ministry, that funds for the scheme would be sent to the state consolidated fund from 2014.In fact in the case of Indira Awas Yojana, the change would begin to be seen from this year itself when the ministry would start receiving a single consolidated proposal for housing from each state rather than separate proposals from 620 districts in the country, as it had done in the past, the minister said.

The Finance Ministry wants funds to go to the State consolidated fund rather than to district authorities or any other body at the district level, he said.

He said this would apply from next year for all central schemes where funds are transferred to district authorities rather than to the state consolidated fund.

Funds bypassing state funds were seen as a major reason behind the corruption that rocked the National Rural Health Mission in Uttar Pradesh.

Hence the move is to stop all flow of funds to district bodies including in the case of the NREGA where funds go to the State Employment Fund rather than to the State Consolidated Fund. Some of the schemes which allow funds to be sent to districts rather than the state include National Rural Health Mission, Sarva Siksha Abhiyan, Mid day Meal, NREGA and IAY.

Economists and experts say that sending funds to district societies set up separately for various schemes keeps the funds outside the scrutiny of Comptroller and Auditor General.  Says Subrat Das of the Centre for Budget and Governance Accountability ''leakage of funds can be avoided only by bringing them under the scrutiny of auditors which is not possible if funds bypass the State treasury.''

The Rural Development Ministry today announced that the allocation per house under the Indira Awas Yojana  has been raised from Rs 45000 to Rs 75000 under new guidelines recently approved by the Cabinet..

The new guidelines would also make building of toilets mandatory in the houses built under the scheme run by the Rural Development Ministry. Jairam Ramesh said that 21 per cent of houses built under the scheme had no toilets as it was not part of the housing scheme. However in future funds for the house would be released fully only when toilets were built , he said.

He said 30 lakh houses are targeted to be built under IAY of which the largest numbers would be in Bihar (7.3 lakh) followed by Uttar Pradesh, (3.6 lakh)  West Bengal,( 2.3) and Andhra Pradesh (2.5).