Close on the heels of the rural job guarantee scheme, the Manmohan Singh government is all set to implement an ambitious Rs 50 billion (Rs 5,000 crore) project to help develop India's backward regions and erase regional imbalances.
The Congress-led United Progressive Alliance (UPA) has decided to revamp the Rashtriya Sam Vikas Yojana (RSVY) programme by expanding its reach and focusing on infrastructure development in backward areas.
The revamped RSVY programme will be launched on Monday by Prime Minister Manmohan Singh at Barpeta in Assam with a new name, Mahatma Gandhi Backward Regions Development Fund (MGBRDF).
Unlike the RSVY programme, which currently covers only 47 most backward districts, the new development fund for backward regions will cover 250 districts - a little less than half the total number of India's 604 districts.
The programme aimed at ridding the country of regional imbalances was formulated by the Panchayati Raj ministry headed by Mani Shankar Aiyar with the sanction of Congress president Sonia Gandhi and Prime Minister Manmohan Singh.
The fund would provide each of the 250 districts a minimum of Rs 100 million per annum, besides an additional allocation depending upon the geographical area and population of the district.
The fund allocated to each backward district would go directly to the Consolidated Fund of the state.
As proof of its commitment to erase regional imbalances, the major chunk of funds would go to most needy and backward states like Bihar and "KBK regions" of Orissa.
The KBK region comprises the erstwhile Kalahandi, Bolangir and Koraput districts, which have now been subdivided into eight districts and are infamous for starvation deaths among poor tribal populations.
The Rs 50 billion MGBRD Fund comprises three components - a Rs 10 billion special package for Bihar, another Rs 2.5 billion for the KBK region of Orissa and the remaining Rs 37.5 billion to be distributed among all the 250 selected backward districts on the basis of their area and population.
Perhaps the greatest beneficiary of the new fund will be Bihar. As many as 36 of the state's 37 districts have been included under the scheme.
Accordingly, in addition to the Rs 10 billion special package, 36 districts of Bihar would together get another Rs 3.6 billion.
The new fund would include all the 200 districts where the UPA government's flagship programme, the rural job guarantee scheme unveiled last year, has been implemented.
But it does not imply that the allocations made from the regional disparity elimination fund to the 200 districts would be utilised to provide jobs to the rural poor.
The funds under the regional disparity elimination fund would be specifically used to build sustainable infrastructure like roads, schools, dispensaries, bridges and power transmission lines.
The rural job guarantee scheme, on the other hand, envisages projects that generate mass rural employment and is aimed at ensuring means of sustenance to the rural poor.
The regional disparity fund will try to bridge critical gaps in local infrastructure and other development requirements that are not being adequately met through existing schemes, including the rural job guarantee scheme.