More funds for Kerala likely

The Planning Commission is considering a proposal to increase central assistance for states like Kerala whose requirements do not fit in with the currently prevalent centrally sponsored schemes (CSS). These states could also be provided with greater flexibility in using these funds.

"We had raised the issue during the regional consultation in Bangalore and expect a change in the policy of state plan finalisation.

Most centrally aided projets do not fit our conditions," said Kerala Chief Minister, Oommen Chandy after a meeting with Planning Commission to finalise the annual plan for the state for the next fiscal.

"Requirements of a number of states, particularly in the south, do not fit into the kind of CSS the government has. Most of them deal with meeting minimum requirements in education, health and employment. So, there is a case for allowing these states the freedom to structure their plans as per their requirements," said an official in the Planning Commission.

A case could also be made to allow fiscally responsible states to directly access the market rather than depend on the centre for loans and focussing on providing government funds to relatively backward states, they added.

At the meeting today, the plan body suggested that ministries should use Kerala for pilot projects on second generation issues in health and education to plan for the problems likely to crop up over the rest of the country in the future.

Also, the centre could examine how the Kerala models in social security, local body administration, rural development and technical education could be replicated across the country.

The need for more productive employment of educated youth and the need to club various CSS to take optimum benefit of the Centres initiatives was emphasised at the meeting which put the annual plan for 2005-06 at Rs 5,369 crore, up from Rs 4,852 crore in the current fiscal.

Greater flexibility in case of CSS relating to employment, education, social secutiry, local bodies and backwardness was also recommended.

The state was however advised to improve efficiency through reforms of public undertakings, complete long pending irrigation, water supply and other externally aided projects.

Planning Commission Deputy Chairman, Montek Singh Ahluwalia said that the state should explore the possibility of generating foreign investment in infrastructure and tourism sectors. Public-private partnerships in these areas should be encouraged, he added.