With several states unable to utilise funds provided for the governments flagship rural roads programme in the current financial year,the government is planning to divert some of the schemes funds to the rural housing programme Indira Awas Yojana (IAY).
In a letter to Finance Minister P Chidambaram dated October 27,Planning Commission Deputy Chairman Montek Singh Ahluwalia has proposed redirecting funds from the PMGSY funds towards IAY to increase the latters target for 2013-14 from 24.80 lakh houses to 30 lakh houses. This proposal comes after Union Rural Development Minister Jairam Ramesh sought an increase in IAY budget by Rs 3,000 crore to be offset by a reduction in the PMGSY budget and subsequently met Ahluwalia in September to discuss the issue.
According to the letter,while Ramesh is aware this would require a significant reduction in the budgetary allocation of the crucial rural roads programme,he is of the view that some states are simply not in a position to prepare suitable projects in PMGSY to absorb the amounts provided.
In the Union Budget for 2013-14,PMGSY has been allocated Rs 21,700 crore and IAY Rs 15,184 crore. The government is also planning to shift an additional Rs 1,000 crore from PMGSY to the Rural Road project II for roads in LWE-affected areas implemented by the Ministry of Transport and Highways.
The Rural Development Ministry has also decided to allocate Rs 500 crore from National Rural Livelihood Mission to Naxal-affected districts to give enhanced focus to these areas. This follows Chidambarams direction to the Planning Commission in August to locate savings of over Rs 1,000 crore within the gross budgetary support for 2013-14 for a scheme named Additional Central Assistance.