J&K hikes district plan outlay to 40%

In order to boost developmental activity in rural and far-flung areas in Jammu & Kashmir, Finance Minister Muzaffar Hussain Baig on Monday announced that the government had hiked the district plan outlay to 40 per cent from the existing 30 per cent.

"I'm proposing some far reaching, and in my view, prudent measures on the plan side... to start with, I have hiked the allocations for district plans from 30 percent to 40 percent," Baig said during his Budget speech.

He explained that the government was exploring the possibility of passing on the share of districts not in the form of loans and grants "but only non-debt creating transfers".

"At present, a part of the resources are given are given to districts in the form of loans. This system needs a review. Given the fact that districts bear no servicing a repayment liability, it makes little economic sense to finance district plans through loans. The state government will raise the required loans and, if administratively possible, pass it on without any compositional demarcation," Baig said.

He said that this would improve the quality as well as the quantity of spending at the district level.

"A committee will be appointed to work out the modalities of financing district plans without any debt creating transfers. This will go a long way to address the issue of intra-regional balance and the equalisation of public services across districts."

The second major initiative, Baig proposed, is to transfer the committed liabilities of the previous plans to the non-plan side.

"To start with, this year I have transferred plan revenue expenditure of seven major departments to the non-plan side with resources. This will make the plan exercise more transparent, effective and realistic. Technically speaking, all committed liabilities of a plan have to be transferred to the non-plan side at the end of each plan. But, in our case, this has not happened for the last sixteen years. No liability has been transferred since the Sixth Plan. The result is that almost 40 per cent of the plan is spent on salaries and travelling allowance."

Virbhadra's plan for Himachal

Himachal Pradesh Chief Minister Virbhadra Singh, who completed three years in office today, announced a nine-point programme for development of Himachal into a "model and modern" state.

This included connecting all gram panchayats by roads by March 31, 2008.