Financial Daily from THE HINDU group of publications
Tuesday, Apr 09, 2002
Can Gujarat fund another rehabilitation?
THE Prime Minister, Mr Atal Bihari Vajpayee, on April 4, announced a Central relief and rehabilitation (R&R) package for the Gujarat riot-affected, that barely breached Rs 25 crore. One year back, a similar R&R package to the State from the Centre was pegged at Rs 500 crore. On top of this, the aid from various bi-lateral and multi-lateral bodies that were pledged for rebuilding the quake-hit Gujarat stood at $1,632 million.
True, the quake damage was much more vast with overall losses put at nearly Rs 18,000 crore and loss of life at 13,805. In sheer numbers, the present tragedy fetches up way short with total damages not crossing Rs 3,000 crore and loss of life at some 820, though this is one figure that is still climbing. The State government has already allocated Rs 60 crore towards the present rehabilitation efforts, Rs 150 crore being the maximum mark-up.
The two rehabilitations too could not have got any more unlike each other, the way key issues are getting addressed. While the quake-affected took umbrage at the Government's efforts to relocate them from the sites where their houses originally stood, the riot-affected point blank refuse to go back to their houses, whether partially or fully gutted.
And it is not as if the quake rehabilitation would get fully completed before the State government takes up the one for the riot victims. It is far from over and the latest report of the Comptroller and Auditor General (CAG) of India has pulled up the Gujarat government for the slow pace of relief and rehabilitation for the earthquake victims where some Rs 483 crore remained unspent till October last. This gives an impression that Gujarat is flush with funds. Nothing could be farther from the truth. The State's finances having never been in such a disagreeable condition before, each and every instance of fund disbursement is being closely monitored.
Gujarat's current economic ill health is being attributed mainly to a Rs 1,000-crore shortfall in sales tax (ST) for 2001-02.
As against the projected ST of Rs 6,700 crore for the year, the actual realisation stood at Rs 5,714 crore. It is another matter that it also reflected a negative growth of Rs 245 crore, compared to Rs 5,963 crore collected the previous year. Therefore, when it came to paying the March salaries of the State government employees, it was reportedly the time tested plan of diverting funds earmarked for capital expenditure into revenue spending that the Government resorted to. It may be recalled that the CAG report last year had pulled up the Gujarat government for similar financial irregularities to the tune of Rs 2,971 crore as of March 2000.
As if these were not enough, the State government is already overdrawn some Rs 600 crore from the Reserve Bank of India during the last couple of months.
This is understood to be over and above the `Ways and Means' advance of some Rs 450 crore already availed by Gandhinagar. On the other hand, the bills from various contractors, whose unpaid dues as of March 31, were said to have risen to Rs 500 crore.
There is no doubt that the State government has been found wanting both in giving out cash doles to the riot victims and playing a concrete role in making ends meet at the scores of refugee camps that have sprung up over the last one month.
For a State with coffers almost empty, the Central assistance for the riot-affected, however small, would surely come in handy.
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