New Delhi, Oct 18: The government is planning to set up a Rs.40,000-crore flexi-fund to help states address specific rural development needs.
The fund will be available to states from the next financial year till the end of the 12th Five-Year Plan in March 2017. The central government will have a 70 per cent share in the fund.
“For the first time, we are putting together a flexi-fund of Rs.40,000 crore that will be available to all states to spend on rural development scheme,” Rural Development Minister Jairam Ramesh said at a joint press conference with Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The minister said the fund would ensure better targeting of state-specific projects.
“The fund will ensure better targeting and the states will be free to use funds as per their requirements,” Ramesh said.
The fund would be available as an additional amount that can be spent either on existing centrally-sponsored schemes of the rural development ministry and the drinking water and sanitation ministry.
The 12th Five Year Plan (2012-17) has proposed an allocation of Rs.490,000 crore to the rural development ministry and Rs.100,000 crore to the drinking water and sanitation ministry.
Ahluwalia said there is a need for a restructuring of the existing rural development ministry schemes, saying that those “need to be made more flexible”.
“We are taking a fresh look at social sector schemes,” he said.
Different states face different development challenges and Ramesh had spoken against “too much centralisation” in the programmes.
“The biggest problem today is that all rural development work is based on national guidelines that cannot take care of the specific problems of states,” reports had quoted him as saying earlier.
His ministry believes the setting up of the flexi-fund would send a powerful signal about the government’s commitment to cooperative federalism.
The fund proposal would be placed before the cabinet for approval.