The final guidelines for Panchayati Raj Ministry’s soon to be launched flagship scheme, the Backward Regions Grant Fund (BRGF) further extends decentralisation to the states as well as Panchayati Raj Institutions (PRIs) than the earlier drafts of BRGF guidelines. The ministry is expected to launch the BRGF scheme sometime early November.

Under the scheme the Central government will provide an annual assistance of Rs 3,750 crore to 250 backward districts selected by the Planning Commission. Of this, Rs 250 crore per year at the rate of Rs 1 crore a district is earmarked for capacity-building of PRIs in those districts.

The backward districts will also get Rs 2,500 crore at the rate of Rs 10 crore a district as untied funds to the Panchayati Raj Institutions. The remaining Rs 1,000 crore will be distributed among districts on the basis of their population and area.

The earlier drafts prepared by the ministry had envisaged Rs 250 crore earmarked for capacity-building to be controlled from the ministry at the Centre. The 27 states where BRGF scheme will be launched will have to constitute a state-level body to look at the requirements of capacity-building in their states and the role of Central government will be limited to one member from the ministry being part of that body.

It is learnt that the final guidelines allows a maximum of 4 per cent of the untied funds available to each district to be used for recruiting or hiring staff by the Panchayati Raj Institutions. But, it also adds that this allowance will not be a permanent feature and the PRIs will have to ensure that they are able to raise revenues to pay for these personnel within 5 years of the launch of the scheme.

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