More flexibility in fiscal devolution, fund use on cards, says Montek

Our Bureau Hyderabad | Updated on November 05, 2012 Published on November 05, 2012

Montek Singh Ahluwalia , Deputy Chairman of the Planning Commission speaking on Centre State Relations in Indian Fiscal Context at a seminar in Hyderabad on Monday. – P.V. Sivakumar

The Government plans to bring about some more flexibility in fiscal devolution and use of funds allocated to States, according to Montek Singh Ahluwalia, Deputy Chairman Planning Commission.

He said the Government was keen to extend some more flexibility in terms of how the funds allocated are used within a particular scheme framework. States have been asking the Centre to extend greater freedom in the use of funds allocated to them under various Centrally sponsored schemes.

The matter of flexibility of use of funds will be taken up at the Cabinet for approval. Once this gets Cabinet nod, the ministry concerned and the States will sit together and decide how to use the funds thus allocated in a relative flexible manner, he said.

The issue of bringing about flexibility of about 10 per cent of the fund is under consideration. That does not mean States can redeploy funds of one scheme into another scheme. Instead, they will have the flexibility to use the funds innovatively within the scheme framework, he said.

He was here to address the two-day National Seminar on Centre-State Relations in Indian Fiscal Context hosted by Centre for Economic and Social Studies.

Second half will be better

Later speaking to newspersons, he said during the second half of the financial year, growth rate will be better. “The deceleration will stop. Making prediction may not be right. Effects of changes brought about would be felt over time.”


Published on November 05, 2012
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