Don’t drastically cut rural funds, FM told

Invoking UPA chairperson Sonia Gandhi's stand, rural development minister Jairam Ramesh has asked finance minister P Chidambaram to not aggressively cut the budget allocations to his ministry. Saubhadra Chatterji reports.

Invoking UPA chairperson Sonia Gandhi's stand, rural development minister Jairam Ramesh has asked finance minister P Chidambaram to not aggressively cut the budget allocations to his ministry.

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In a drastic measure to pull the fiscal deficit below 5.3% of the GDP, the finance ministry had chopped off more than Rs.21,000 crore — almost 30%— from the original figure. After defence, the rural ministry enjoys the highest budget support.

“Both Prime Minister and you have spoken about the need for fiscal consolidation, but not at the cost of our social priorities... The UPA chairperson has also repeatedly expressed similar sentiments,” Ramesh wrote in his letter to Chidambaram.

Even as the finance ministry cuts Rs.21, 175 crore from the rural budget, Ramesh has sought partial restoration of the original funding — at Rs.54,742 crore.

He argued that if the finance ministry sticks to its proposed cut, his ministry would be left with just 27% funds to undertake works in the last quarter.

Ramesh has also asked the finance minister to not look at the expenses incurred on individual schemes, but take into consideration the overall expenditure for the demand in rural development and allow variations in fund allotment in some schemes.