Jairam Ramesh proposes Rs40,000-cr flexi-fund for rural development

Minister for rural development Jairam Ramesh has proposed the setting up of a flexi-fund for rural development (RDF) with a corpus of Rs40,000 crore, to be shared by the centre and the states on a 70:30 basis.

Stating this at a joint press conference with Planning Commission deputy chairman Montek Singh Ahluwalia, Ramesh said the flexi-fund could expand with the mid-term review depending upon the use of funds. The fund, which would be available for the remaining four years of the current five-year plan, is open to all states, he said.

"The fund will ensure better targeting and the states will be free to use funds as per their requirements," Ramesh said.

The government had proposed an allocation of Rs490,000 crore for rural development programmes during the 12th Plan (2012-17) and another Rs100,000 crore for drinking water and sanitation programmes of the ministry of rural development, Ahluwalia said.

"We are taking a fresh look at social sector schemes," he said, adding that these schemes need to be made more flexible for better implementation.

Ahluwalia suggested restructuring of all existing schemes for rural development, including the flagship schemes, so as to include a flexible component in the schemes.

The proposals also include making a portion of the funds allocated for these flagship schemes available to the states independent of the guidelines.

The current proposals such as including a flexible component in all the schemes, will go to the cabinet for approval, Ahluwalia said, adding that these changes are expected to become applicable in a year.