Rs 6,700 cr lies unspent in UP

It could not be used due to the model code of conduct in force.

Uttar Pradesh has a surplus of Rs 6,700 crore in its consolidated fund this year.

The money could not be used in the last days of the financial year ended March 31, as a result of the model code of conduct that has been enforced by the Election Commission due to the ongoing Assembly election process.

The state's total receipts in the last fiscal were estimated at Rs 80,540 crore, while expenditure was expected to be Rs 87,308 crore, with a fiscal deficit of Rs 6,788 crore.

While Rs 6,700 crore could not be "utilised" in the last days of the fiscal year just ended, the actual surplus in the state government's finances is even higher, as a large part of the funds shown as utilised has actually been transferred to the "personal ledger account" of various departments and agencies of the state government.

The enforcement of the model code of conduct restrained the government from spending on populist schemes such as unemployment allowance to jobless youth, one-time grant of Rs 20,000 to girls up to Class 12, pension to the aged and widows and distribution of free saris to rural women.

The Election Commission specifically banned the release of funds for welfare schemes after the enforcement of the code. The size of the annual plan for 2006-07 was Rs 24,641 crore, while utilisation in April-February was Rs 16,000 crore.

The established practice in Uttar Pradesh is for the state government to release as much as 30 per cent of funds for capital works in the last month of the fiscal.

This could not be done in March 2007 due to the model code of conduct. Low utilisation of funds for development and welfare schemes is expected to have an adverse impact on state finances, by affecting the size of the plan outlay for 2007-08.