Step-up allocation for rural development, says ministry

If the government wants the Swarnajayanthi Gram Swarojgar Yojana (SGSY) to succeed, it must increase the Rs 1,800-crore allotment, made for the programme in the 2007-08 Budget, to Rs 3,000 crore, the Ministry of Rural Development has said.

The ministry also emphasised the need to bump up allocations for the Pradhan Mantri Gram Sadak Yojana (PMGSY) from the current Rs 11,000 crore (of which, Rs 4,500 crore is through a loan from Nabard) to Rs 15,000 crore.

"The SGSY requires a huge increase in its budget. Lakhs of SHG members have been awaiting financial assistance for years. Besides, the ministry is considering a review of the credit-subsidy ratio. The subsidy component needs to be hiked. Currently, we follow norms that were formulated in 1999, when the programme was launched," said an official.

The matter will be raised on December 20 when the ministry officials consult the Planning Commission to finalise the annual plan.

The SGSY aims at removing rural poverty and promoting entrepreneurship among villagers. The PMGSY is meant for building rural roads. Both are components of the ambitious Bharat Nirman plan of the government, seeking to promote public-private partnership.

"Our request of Rs 3,000 crore for the SGSY is a realistic demand. Last year, while the budgetary allocation was Rs 1,200 crore, we spent Rs 1,400 crore on the programme," the official said.

The PMGSY's target is to connect 18,000 habitations next year with roads. The rural development ministry is asking for Rs 15,000 crore.

"We have a target of connecting 18,000 habitations next year, which will be 6,000 habitations more than this year. This obviously requires more money and we expect that the Planning Commission would accept the demand," PMGSY officials said.

The PMGSY has a target of connecting 12,000 habitations this year. "Of Rs 11,000 crore for the programme this year, we disbursed more than Rs 3,000 crore by the September end. We will meet both the financial and physical targets in the next three months as most of the work has been completed during this period," PMGSY officials said.

If the government accepts the demands of the ministry, it could spend up to Rs 5,200 crore more in the coming Budget than the allocation last year.