Corporate type incentive to ministries

Corporate sector uses financial incentives to achieve targets. Taking a clue from that, finance minister P Chidambaram has tried to push Central ministries to achieve maximum impact from the modest plan expenditure hike of 6.5% in 2013-14 in the crucial election year. Chetan Chauhan reports.

Updated on: Mar 1, 2013, 23:00:22 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Corporate sector uses financial incentives to achieve targets. Taking a clue from that, finance minister P Chidambaram has tried to push Central ministries to achieve maximum impact from the modest plan expenditure hike of 6.5% in 2013-14 in the crucial election year.

The finance minister has provided Planning Commission, which disburses money to Central ministries, with an unallocated fund of Rs 5,000 for next fiscal. "We have Rs 5,000 crore of free money for ministries doing a good job," panel's deputy chairperson Montek Singh Ahluwalia said.

The plan panel would soon draw parameters for ministries to improving delivery and has the unique identification (UID) payment bridge to gauge the outcome. Finance minister P Chidambaram in first budget of UPA-1 had emphasized on measuring outcomes but there was no mechanism for it.

The panel has the UID platform to check the claims of ministries on disbursement of money to the beneficiaries. The Prime Minister's Office has asked the ministries to create database of beneficiaries of their schemes --- whose traditional record-keepers were state governments --- under the direct benefit scheme (DBT).

Chidambaram has provided money to individual ministries such as Petroleum and Food, whose schemes presently are outside of DBT, to create a similar database for direct transfer for subsidies by end of this year.

As rural development minister Jairam Ramesh quoted, the DBT pilots have shown that expenditure can fall by around 20 % with same number of beneficiaries. "Aadhaar based DBT prevents duplication," Ahluwalia explained.

The UPA government in last two budgets had generously hiked plan expenditure, which mostly includes social sector schemes, but that may not have translated into wider benefit spread.

The reason was that most ministries spent around 40 % of their financial kitty in last three months of the financial year. In the first nine months of this financial year, the Central ministries were able to disburse just 54% of their allocations in the budget, forcing the finance ministry to cut their allocations by 20%.

"I have provided sufficient funds to each ministry consistent with their capacity to spend the funds," Chidambaram said, in his budget speech. The 5,000 crore incentive will be employed by the plan panel to push the ministries to put in place systems for quicker and effective disbursement of funds to the state governments.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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