PM wants ministries to weed out small schemes

With a new-found optimism gripping the Congress-led UPA of returning to power at the Centre,the Prime Ministers Office....

With a new-found optimism gripping the Congress-led UPA of returning to power at the Centre,the Prime Ministers Office (PMO) has directed all ministries and departments to suggest ways to downsize existing programmes.

Prime Minister Manmohan Singhs principal secretary TKA Nair has written to the ministries,asking them to submit their plan by April 16. The move is aimed at creating financial viability to induct new programmes in line with the policy commitments of the new government.

Confirming the PMO directive,sources said,TKA Nair has directed that programmes which can be modified or deferred should be identified by May16 so as to create space for induction of new priorities.

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At present,there are only 50 central and centrally sponsored schemes,which had an allocation of more than Rs 500 crore for this year. This implies that for creation of any meaningful space,a large number of ongoing programmes will have to be deferred. Politically,this will be an uphill task as the government had introduced zero budgeting system three years ago and the then finance minister P Chidambaram had publicly expressed concern that proliferation of small schemes was hampering meaningful implementation.

In the Budget for this year,there are 908 Central schemes with a total allocation of Rs 77,973.6 crore of which only 24 schemes have an allocation of more than Rs 500 crore. These 24 schemes account for 42 per cent of all centrally funded schemes. The balance 58 per cent schemes have a total allocation of Rs 12,0876 crore.

Big-ticket schemes are generally social programmes such as the National Rural Employment Guarantee Act and the Jawaharlal Nehru Urban Renewal Mission which are unlikely to be pruned,having been billed as pro-people and hence with vote-catching potential. So the axe will most likely fall on smaller schemes,which have outlived their utility.

The initiative fits well with the budgetary announcement that 0.5 per cent to one per cent of GDP would have to be additionally funded to states to help them counter slowdown. The ministries are expected to highlight their plan along with financial implications and their commensurate impact on public finances.

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Already under pressure due to a ballooning fiscal deficit after the two stimuli,it would not be easy for the new government to allocate more funds to put the economy on a fast track. Economic experts have repeatedly been asking the government to provide concessions to the manufacturing and export sectors,badly hit because of the global economic meltdown. Moreover,providing huge concessions,as done before elections,might not be possible after June 2,they said.