Newly established Niti Aayog is expected to come out with a well-thought formula based on which contributions of the Centre and States for running welfare schemes would be determined. The Niti Aayog has formed a sub-committee headed by the Chief Minister of Madhya Pradesh to fix the issue. The panel would table its recommendations by June this year.
Informing about the measure taken by the Centre to resolve the confrontations often arising between the Centre and States, Member of the Niti Aayog Bibek Debroy said there was another formula in the meantime.
"All the schemes running in the country have been categorised into two. In the category-A, there are schemes under Central Sector schemes. They get 100 per cent funding from the Centre. Centrally sponsored schemes were in the category-B. As the Union Government has its own deficit reduction targets and fiscal responsibilities, there is a need to rationalise the contribution coming for the category-B scheme from the Centre.
The sub-committee under Madhya Pradesh Chief Minister's chairmanship has been formed that would recommend how many schemes to be funded with how much of share and what special funding can be done for special States such as Jharkhand," said the noted economist in a summit organised on State's development on Wednesday.
The States, including Jharkhand, have been expressing concern over diminishing contribution coming from the Centre for the Centrally-sponsored schemes. This often exposed States to precarious situation as after going ahead with the schemes they face financial crunch after the Centre revises its share over a period of time. The issue was raised by Principal Secretary to the Chief Minister Sanjay Kumar in the deliberation.
"Centre discontinues or lowers funding to the schemes after starting those with much fanfare. This left to us to deal with the situation. We do not have that much of revenue and neither left with any option but to continue. This becomes unmanageable for the States," said Sanjay Kumar.
Debroy, who had earlier been associated with Jharkhand as a chairman of a committee formed by the Arjun Munda Government in 2011 to suggest ways and measures for development of the State, responded that the Niti Aayog's sub-committee, though would submit its recommendations in June, for the time being all the centrally-sponsored schemes would run on 50:50 basis.
"The recommendations are to come in June but the funding could not have waited. Thus we have decided to fund such schemes in 50:50 ratio from April 1. Though, I want to make it pretty clear here that it does not mean the contribution would be continued in this fashion in future also. It all depends on the recommendations of the sub-committee," added Debroy.
Officials of the State Government narrated areas of concern before the Niti Aayog member in the meeting. Finance Secretary Amit Khare intervened, saying that though additional Rs 5,620 crore would come under the fresh formula of the 14th Finance Commission but restructuring of centrally-funded schemes have taken away funds coming under various schemes.
He also threw light on the financial health of the State. "It looks good but for different reasons. Jharkhand is a revenue surplus State not because of higher growth but due to lower expenditure. Our plan and non-plan spending is quite low in comparison with Chhattisgarh; the State with similar conditions. If all the vacancies are filled we would see additional burden on the exchequer," said Khare.
He also cautioned against complacency relating to 6-7 per cent growth rate for Jharkhand and stressed that the leap should be 11 to 15 per cent so that the State can manage a "quantum jump" from its years of penurious legacy.