Estimating earmarking of funds
By T.R. Raghunandan, 29 Apr 2016

It is common for governments to conceive of new schemes at the drop of a hat and then make grandiose pronouncements of the money allocated to these. It is another matter altogether to actually make that money available to the implementing agencies, whether they be local governments or departmental offices at the sub-District levels, so that the programme can be implemented. This problem becomes even more acute when politicians are fond of making off the cuff pronouncements on the launch of new programmes.

There is a reason why Finance Department Secretaries are generally impassive and Sphinx-like. An excitable Finance Secretary is a liability, both to her family and to the government. If a Finance Secretary were to have an apoplectic fit on coming to know that the Chief Minister announced a big allocation, say, for the breeding of Angora rabbits (it has happened), it would not be conducive to the former’s personal health. Besides, it is the task of a Finance Secretary not to reveal his personal feelings about government programmes, however much it might rankle that it looks idiotic in the first place and that he was not consulted before the impromptu announcement was made. In such circumstances, Finance Secretaries take the simple expedient path of agreeing to release money for every in a non-committal fashion and then refuse to do so when formal orders are sought.

Therefore, it is no wonder that programmes announced in Budgets rarely pan out the way they ought to, unless there are urgent political motives to be seen as being effective.

We came across a classic case of the tendency of the government to announce a programme and then apply their mind later on to find the money to run it, during the Paisa for Panchayats research programme in Kolar District, Karnataka State.

The Government of Karnataka announced a new scheme named ‘Krishi Bhagya’ in the 2014-15 budget, aimed at providing insurance cover to small and marginal farmers. However, it took five months for the government to get its act together; the scheme was launched only in September 2014.

Quite clearly, the Finance Secretary had out-sphinxed the Sphinx.

When the money for the scheme was finally provided in September, only district allocations were made by the State. From the district level, from the point of view of both transparency and administrative efficiency, it would have made a great deal of difference if the district allocation was split up into block-level allocations. However, no such thing was done.

As a result of the delay and the absence of a publicly shared game plan to implement the programme, the release of funds by State government was random from month to month and peaked towards the last four months of the financial year. Expenditure increased drastically in the months of February and March, as shown in the figure.

The delayed releases and the skewed expenditure resulted in a significant backlog of Rs. 2433.1 lakhs of unutilised funds, largely due to Krishi Bhagya, remaining unspent with the Agriculture department at the end of the fiscal year, comprising of 71% of the total funds released under the State Sector for Agriculture in 2014-15 to Kolar district.

This did not trouble anybody. The farmers who might have benefited from this programme did not know enough to complain.

Could the programme have been run in a more beneficiary friendly way?

Indeed, the starting point for implementation of the scheme, even if its launch was delayed by the State Government, would been to sub-allocate the district allocation of Rs. 2390.5 lakhs to each taluk on the basis of an informed study of the possible demand. The total numbers of small and marginal farmers in each of Kolar district’s taluk is available in the government’s Agricultural Census of 2011. Based on the inter-se ratios of such farmers in each taluk, the district allocation could have been sub-divided to each taluk. This would have given each taluk a head start in implementing the programme and offset the delay.

But no such thing was done.

Who is there to ask?

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