Fund crunch may see drastic cuts in plan spend

HYDERABAD: The impact of T agitation in the last fiscal year 2009-10, natural calamities during the last 15 months, slow inflow of Central funds and the lurking fear of another round of agitation after December 31 have caused a funds crunch for the state government, slowing down implementation of various schemes like Jalayagnam, fee reimbursement, payment of interest subsidy to self-help groups (SHGs) etc.
Though revenue receipts have shown an increase of about 20% so far this fiscal compared to that in the last year, there has been a heavy burden on the state government on account of the Pay Revision Commission recommendations, which is Rs 2,700 crore per annum. Add to this the requirement of at least Rs 5,000 crore to rescue from the farmers hit by heavy rains and cyclones.
Other factors which have suffered due to acute financial position of the government are Indiramma housing, payment of old age pensions, works pertaining to roads and buildings and various panchayat raj schemes.
The government had claimed that it was giving top priority to empowerment of poor by providing them easy access to credit from banks through `paavala vaddi' (3% interest) scheme for the SHGs.
The government had allocated Rs 200 crore towards interest subsidy and Rs 365 crore for Abhaya Hastam, a contributory pension-cum-insurance scheme for SHG members. But of this, only Rs 270 crore was said to have been released. Following delay in government's contribution to the 3% interest subsidy scheme, many banks are now likely to declare them as defaulters and deny them fresh loans.
If declared as defaulters, the SHG members will have to pay 12% interest on the loan amount.
The irrigation project works too have come to a near standstill as only Rs 6,000 crore had been released so far, and of this over Rs 4,000 crore was spent on clearing the pending bills. According to official sources, it may not be possible to spend more than 55 to 60% of the planned expenditure by March.
According to the projections made in the budget, the planned outlay is Rs 40,313 crore. Of this, the state plan is for Rs 36,743 and the centrally sponsored schemes account for Rs 3,570 crore. But sources indicate that of this amount so far only Rs 20,000 crore has been spent.
Similarly, though Rs 1,932 crore has been proposed for old age, widows and disabled pensions, the sources claimed that only Rs 600 crore has been released and that too towards arrears. The fee reimbursement scheme too has run into trouble as it is found that there are several bogus claims.