The trouble stems from the decentralised model of Plan utilisation practiced by the state. Almost 40% of the Rs 7,700-crore Plan funds are earmarked for civic bodies. But the civic bodies are simply not equipped to take on such huge expenditure at a fast clip.
The ruling alliance in Keralathe Left Democratic Frontwas hoping to pass an order enabling the civic bodies, ministries and departments to carry over 40% of the unused sum to the next fiscal. But the sudden announcement of the election schedule has scuppered the plan.
The situation is desperate, as early figures sourced by FE shows that some corporations have not used even half their allotment within the March 31 deadline. Kozhikode Corporation, for example, had utilised just 45% of its Plan allocation by mid-March.
When contacted by FE, the state finance minister TM Thomas Isaac, insisted that the final picture would look better. But sources in his department said the bills forwarded to the treasuries saw cash flows of a whopping Rs 1,150 crore on March 30 and Rs 1,021 crore on March 31, 2009, as departments sought to inflate their utilisation records to the best by March 31.
The only relief for civic bodies is that expenditure for housing schemes were provided a 15% carry forward option, before the poll code came into force. But here too, the provision is for expenditure in works accounts. State Planning Board officials suspect that the category of expenditure could provide a convenient slot to park funds for non-capital expenses like, say, painting office buildings. The vice-chairman of the State Planning Board is noted economist Prabhat Patnaik.
Expecting to nip such a year-end rush, as Keralas record on Plan implementation is weak, minister Thomas Isaac had charted out a Plan realisation calendar. The ascending schedule had it that utilisation in the first quarter should be 10% of the total allocation, rising to 20%, 30% and 40% in the second, third and fourth quarters. But this calendar too has failed to do the trick.
While arguing that the utilisation level could be higher when the consolidated final picture is out, the minister does not hide his disappointment over the failure of the quarterly targets strategy. It is easy to plan targets but is a different ball game altogether to build up credit absorption capacities and implementation efficiencies at the flick of a hand, Isaac told FE.
In the previous fiscal, 2007-08, the Plan outlay for the state was Rs 6,950 crore. For 2009-10, the sum has risen to Rs 8,650 crore. This is 12% more than the previous years.