Backward states grant fund a far cry

One year and one quarter after it was announced, the government has not been able to make the backward states grant fund operational.

The ambitious Rs 25,000-crore programme was to enable states to take up social and physical infrastructure programmes in the poorest and most backward districts. But a controversy over the selection of districts has held up progress.

A Cabinet note on the fund, to be spent by panchayati raj institutions, was earlier circulated among different ministries and comments were received. The Planning Commission has, however, not yet sent the note to the Cabinet for approval.

"The note has been held up over the finalisation of the districts to be covered under the programme. The note had suggested about 245 districts, of which, some were the same as those covered in the ongoing rashtriya sam vikas yojana. However, questions have been raised internally over the selection of the districts," said an official in the Planning Commission.

The fund, originally announced in Budget 2004-05, was to become operational at the beginning of the current fiscal. However, the first quarter was over and no money had gone to states, he added.

The fund was to continue for five years starting 2005-06. For the first two years, the ongoing rashtriya sam vikas yojana, which covers 150 districts, will continue along with the new programme.

In 2007-08, districts that did not qualify as the poorest and most backward, including the Naxalite affected ones, were to be dropped from the programme.

The creation of the fund was in line with the National Common Minimum Programme, which envisaged the setting up of a backward states grants commission to be used for creating productive assets in such states.

It also envisaged that all non-statutory resource transfers from the Centre would be weighed in favour of poor and backward states.