With the government resources for flagship schemes being limited, policy makers are exploring measures to enhance outcomes achieved through expenditure in the centrally-sponsored schemes (CSS). The thinking primarily is to create an autonomous Independent Evaluation Office (IEO), enhance auditing systems at the Centre and states, and build capacity at the level of the implementing agency to track funds and increase outcomes.
Increasing effectiveness of expenditure in government flagship schemes was one of the most intensely discussed issues in the full Planning Commission meet, chaired by Prime Minister Manmohan Singh, last week that reviewed the mid-term progress of the Eleventh Five-Year Plan (2007-12).
“(There are) Serious problems of effectiveness in implementation, since the central government does not directly control implementing agencies. It also does not withhold funds as long as expenditure is taking place …The central government cannot oversee or control this process to ensure efficient delivery,” the Planning Commission mid-term appraisal report states.
The Plan panel is currently working with the Controller General of Accounts (CGA) in order to allot codes for each flagship scheme and ensure the same are used at the state level so that the expenditure can be effectively tracked. Moreover, as the independent evaluation office comes into existence, the Planning Commission suggests it should periodically track the utilisation of funds released by the Centre for CSS.
The panel is in the process of formulating a Cabinet note for the formation of IEO. Finance Minister Pranab Mukherjee, in his Budget speech on February 26, had also promised an IEO. He had said it would be an independent entity under a governing board chaired by the deputy chairman of the Planning Commission. “The IEO would evaluate the impact of flagship programmes and place the findings in the public domain,” Mukherjee had said.
The mid-term appraisal report also notes the lack of capacity at the local level to design projects and keep accounts. Thus, the Plan panel has suggested that at least 1 per cent of the key CSS operating in the rural areas should be devoted to capacity building.
The government, at both the Centre and state levels, currently has no means to track the actual expenditure by the implementing agency. Ministries can only track outgoing funds from the Centre and have to rely on utilisation certificates from the state governments. Auditing is also weak as a large number of CSS schemes are implemented by autonomous bodies or societies. Moreover, there is no prescribed format of accounts for CSS, which includes government flagship schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme, Sarva Shiksha Abhiyan and Jawaharlal Nehru National Urban Renewal Mission.
The strategy of the Eleventh Plan relied on empowerment of Panchayati Raj Institutions (PRIs) through increased devolution of power at the state level to effectively channelise funds. However, at the end of four years of the current Plan period, the Planning Commission acknowledges that the extent of devolution or empowerment of PRIs is “much below what is needed”.
“When the plan was formulated, we relied on devolution of power to local level bodies enhancing the effectivity of expenditure. However, now the situation is different because of limited resources. The thinking at all levels is very clear — track expenditure and plug leakages. It is a priority,” said an official in the Commission requesting, anonymity.
