Survey rules out abandoning flagship programmes

New Delhi, Feb 28 (UNI) Faced with scathing criticism for poor implementation and being politically motivated, The Economic Survey 2007-08 rules out abandoning the flaship programmes of the UPA government, such as Bharat Nirman and NREGP, or bringing them under the fold of market mechanism.

The Survey tabled by Finance Minister P Chidambaram in Parliament today, pitches for a improved delivery mechanism, realising that the lacuna lay in poor implementation.

It also calls for changing the funding mechanism in favour of States as most social sector programmes are in the domain of State governments.

''Despite the criticism directed at the implementation gaps that these initiatives suffer from...doing away with them or transferring their implementation to market mechanisms are not responsible alternatives, at least not at the current juncture of India's development,'' the Survey said.

For these programmes to be successful, it is necessary that ground level implementation is efficient, the Survey said.

It added, ''For this, local authorities have to play a very large role in the efficiency of these programmes which is completely determined by the activities of the 'last mile'.'' Since the local authorities have the onus of implementation, the survey adds that the Central Government can provide incentives to implement the programmes.

Decentralisation in planning and implementation of programmes is the key to achieving regional development, participation and empowerment of the poor. Transfer of functions, functionaries and finances to local self-governments and participation of institutions like Gram Sabhas is very important.

The section on states has been included in the Survey for the first time which said the pattern of funding by Central government has the objective of making states more self-reliant.

In recent years, the major fiscal indicators of the state governments have witnessed significant improvement. For the first time in about two decades, the State Governments have budgeted, for 2007-08, a consolidated surplus in their revenue account.

The ratio of gross fiscal deficit (GFD) of the states to GDP has also shown a declining trend, with the 2007-08 (BE) at 2.3 per cent.

The improvement is associated in many cases with the enactment of Fiscal Responsibility (FRL) by the State Governments.

Other measures like imposition of Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF) have also been introduced.

All State/UTs Governments have implemented VAT. Some states have also initiated measures to simplify VAT return and others have undertaken steps to evaluate its implementation.

Many State Governments have taken steps for simplification and rationalisation of the tax structure, which has improved tax compliance and enforcement, and reviewed user charges on power, water and transport.

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