Uncertainty over special grants to state

  • Saurabh Chauhan, Hindustan Times, Shimla
  • Updated: Feb 15, 2015 18:54 IST

Even as the recently-formed Niti Aayog convened its first meeting in New Delhi a few days ago, with chief minister Virbhadra Singh in attendance, confusion prevails over funding to the state under its special status.

Central assistance funds and block grants given to the state are meant for strict expenditure on central schemes while as the special plan assistance (SPA) and special central assistance (SCA) can be partially and wholly spent according to the state's priority respectively.

It's the SPA and SCA are much needed by the cash-strapped hilly state. During the days of the now scrapped planning commission, SPA and SCA funds were flexibly granted to the state. For the current fiscal, the Centre granted SPA and SCA to the state as per its assessment during 2012-13. However, since then no there had been no meeting to revise the allocation.

"The allocation was `1350 crore in 2012-13 and the same continued for 2013-14 and 2014-15 without enhancement," a planning official told HT.

There is a set parameter of allocating central grant to the state. It is determined by the Gadgil Mukherjee formula which gives weight to population (60%), per capita income (25%), fiscal performance (7.5%) and special problems (7.5%).

But with the Niti Aayog having replaced the commission, uncertainty looms large as there has been no of meeting of state and central official to negotiate on the special assistance or enhance it.

"Although there was a meeting in New Delhi, what the Aayog's funding pattern will be is yet to be clarified," said principal secretary, finance, Dr Shrikant Baldi.

In the recent meeting in New Delhi, the chief minister did urge that resource allocation for financing the state's annual plans comprising SAP and SCA should continue to flow to the hilly states. He also suggested that the process of consultation between the vice-chairman of Niti Aayog and chief ministers as well as between the CEO of the Aayog and chief secretaries should continue for finalisation of the grant allocation.

The state's 12th five year plan of `22800 crore would continue till 2017. Though centre may have reportedly decided to do away with the annual and five year plans, the state would carry on with it.

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