Large allocations to agriculture under ACA not possible: FM

New Delhi, May 14 (UNI) Finance Minister P Chidambaram today expressed scepticism of making possible large grants under Additional Central Assistance (ACA) for agriculture as demanded by the Planning Commission, but added that its horizontal allocation across States needs to be driven by a transparent formula.

"I note that the Planning Commission has proposed ACA as a desirable method for transfer of resources. It is not clear what will be the size of the envelope that can be accomodated under the ACA formula. I doubt whether large outlays for sectors which require substantial funds can be channelised through ACA," Mr Chidambaram said in his intervention at the Full Planning Commission meet here.

The meeting, which was Chaired by Prime Minister Manmohan Singh, had its theme devising an agricultural startegy for the Eleventh Plan.

The Commission had projected a major hike in the ACA for meeting projects uder different heads in an effort to step up the growth rate in agriculture from the present low level of two per cet to more than four per cent per annum.

Normally, Mr Chidambaram said, such outlays were routed through the Finance Commission or the Planning Commision and take into account overall resource availability and inter-sectoral and inter- State allocations.

The Finance Minister, however, said that even if ACA for agriculture may be desirable, "its horizontal allocation across States needs to be driven by a transparent formula. The size of agricultural GDP and the potential yield gap could be the parametres, but the Commission may be well-advised to discuss the formula and variables with the stakeholders and provide simulations and for benefit of States," he said.

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