House panel questions NITI role in state fund allocation

In the Union Budget 2015-16, the finance ministry had allocated Rs 20,000 crore to NITI Aayog under a new Budget line for Special Assistance to States.

Written by Surabhi | New Delhi | Updated: May 5, 2015 12:56 pm
NITI aayog The panel’s comments come just months after the government dismantled the Planning Commission and replaced it with the NITI Aayog on January 1 to serve as a government “think tank” and provide strategic and technical advice on key issues.

A Parliamentary panel has questioned the allocation of Rs 20,000 crore in 2015-16 to the newly constituted NITI Aayog and has asked the finance ministry to explain why the erstwhile Planning Commission was dismantled if even its replacement would continue with fund disbursement to states.

“The Committee would like to be apprised about the precise mandate of NITI Aayog with regard to allocation of resources to states and the parameters as also the mechanism governing such transfer of funds,” said the Parliamentary standing committee on finance in its report.

The panel’s comments come just months after the government dismantled the Planning Commission and replaced it with the NITI Aayog on January 1 to serve as a government “think tank” and provide strategic and technical advice on key issues.

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In the Union Budget 2015-16, the finance ministry had allocated Rs 20,000 crore to NITI Aayog under a new Budget line for Special Assistance to States.

In its reply to the committee, the ministry had said that funds would be disbursed based on the recommendation of the new agency.

Noting that there was an “element of obfuscation and non-transparency” in how the funds were allocated to the Aayog, the panel said, “The Committee feels pertinent to point out that if the newly constituted NITI Aayog is to perform allocative function similar to the function attached to the erstwhile Planning Commission, it is not clear as to why the Planning Commission was dismantled in the first place,” it said.

However, the Committee, which is headed by senior Congress leader and MP M Veerappa Moily, has asked the finance ministry to explain the mandate of the Aayog.

“The Committee are also at a loss as to understand the deployment and utilisation of such a large corpus, which will be disbursed on the recommendations of the newly created NITI Aayog that has replaced the Planning Commission,” it said.

The panel also underlined concerns over the new mechanism, outside those of the Finance Commission for transferring budgetary resources to the states and expressed worry that there is no allocation under the Normal Central Assistance (NCA). The NCA was disbursed to states as an untied grant by the Centre under the Gadgil-Mukherjee formula.

The Parliamentary panel also expressed concerns that all untied grants to states have been subsumed in “higher devolution of taxes” by the Centre resulting in discontinuation of schemes like the Special Central Assistance for various programmes.

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