Policy paralysis triggers problem of plenty

LUCKNOW: Uttar Pradesh government, which has a large pool of unutilised funds from last year, faces problem of plenty in the current financial year too. While it stands to gain from the Centre's allocation for 2013-14, which shows a quantum increase for various schemes, the liberal dose of funds under the Additional Central Assistance (ACA) will further add to the state's surplus.
But the policy paralysis induced by the government's inherent systematic inadequacies has resulted in tardy implementation of development programmes and poor utilisation of funds earmarked under them. This has led to skepticism, even though the government succeeded in getting the Planning Commission increase its annual plan from Rs 67,016 crore to Rs 69,200 crore for 2013-14.
Apart from the increase in the plan outlay, the state also stands to gain from the Union Budget that shows increase in various sectors for the current financial year. While the Budget has raised the available plan expenditure for 2013-14 by 29.4%, UP also hopes to get more under the poverty alleviation programme following the new definition framed for it and under schemes related to women and children welfare, besides multi-sartorial programmes like Sarva Shiksha Abhiyan, midday meal, Scheduled Caste and Scheduled Tribe sub plan, road projects for which allocations have been increased substantially.
But the worry is that UP is prone to delays in achieving the development goals. This is evident from the government's report card prepared by the planning department on the basis of fund utilisation in 2012-13 financial year. The expenditure made in the year against the sanctioned outlay of Rs 57,800 crore was Rs 49,783 crore, which was only 86%. As against the Central share of Rs 29,935 crore, the government could make use of only Rs 17,751 core, i.e, only 59%.
Another major concern is the incompetence of the administrative apparatus to receive full dose of additional central assistance (ACA) meant for different social sectors. This contained a total outgo of over Rs 10,000 crore. The fund received by the state against this allocation was just Rs 3,475 crore in 2012-13. The Centre releases fund under its assistance on the basis of the utilisation certificate furnished by the state government. But since UP government could not do so, it failed to get the full dose of the assistance.
UP government's own document show the dismal performance on this front. The state received Rs 276.41 crore against Rs 1,700 crore allocated under the Accelerated Irrigation Benefit Programme (AIBP), just Rs 63.15 crore against Rs 2,400 crore placed under the JNNURM, Rs 207.68 crore against Rs 689.05 crore of Backward Region Grant fund (BRGF), Rs 1,110.27 crore against Rs 1,613.08 crore of the National Social Assistance programme (NSAP) etc.
Likewise, UP falters on the Bundelkhand package in which it could get only Rs 207.04 crore against the total sum of Rs 1,405.91 crore. However, the state received the complete grant of Rs 800 crore meant for Maha Kumbh, which was mainly for construction work.
The figures clearly show that UP government needs to improve its performance in implementing the development schemes for which huge funds are already available. The main reason for this is laxity which, n turn, is attributed to state's unbridled bureaucracy, which remains in a comfort zone due to poor administrative control.
The trend continues as the government machinery is still slow in fund utilisation. The tendency to delay shows no change even after chief secretary Jawed Usmani issued warning against the delay and has repeatedly expressed concern over the tardy pace of development schemes.
The review of the first quarter of the current financial year makes a depressing reading. So far, only Rs 5,000 crore of total outlay has been spent. This comes to around 7%, which is far below the desired level of 20%. In this regard, the performance is far below in PWD, irrigation, health, urban development and power sectors.
Likewise, the review of resource mobilisation also presents a bleak picture. The major resource mobilisation comes from the state's own taxes and their realisation has so far been below the desired level of 25%. As against the target of 72,861 crore revenue from all taxes, the state collected only Rs 14,762.38 crore till June 30. Further, there is a shortfall of over Rs 2,000 crore in the tax collection.
The prevailing situation thus calls for a drastic shift from a lax to goal-oriented development approach. The current approach of pursuing development goals through sectoral approaches will not suffice. The laidback attitude will leave behind the vulnerable and the poorest communities and the added worry now is that the middle class is beginning to feel more insecure. No social or economic order is secure if it fails to benefit the majority of those who live under it.
A pragmatic way to is to combine the short-term and long-term strategies to address the systemic inadequacies. Availability of fund is one aspect, but the bigger challenge is make its optimum utilisation since the benefit of development schemes will depend on the government's ability to make optimum use of the allocations.