First Independent Review Mission for Backward Regions Grant Fund State Report

2.6 Alignment and Convergence

Very few of the BRGF supported investments at the PRI levels are combined with investments from other schemes or coordinated with these schemes. Contrary to this, there is a strong vertical coordination and co-funding from various tiers of governments (district – Intermediate Panchayat and Gram Panchayat). The grants from the fiscal commissions are contributing to some of the schemes, but with very small amounts. In some districts, project funding from BRGF is integrated with funds from own source revenues and funds from the fiscal commissions.

2. Quality of the Investments and Maintenance Issues

Without conducting a detailed review of the quality of the investments and technical features, the team could get an impression from various types of investments made during the field-trip to various PRIs, where projects were visited (anganwadi, school walls, roads, street lighting, gram Panchayat buildings) and from pictures, cost documentation and other sources, interviews with beneficiaries, engineers and others that the investments are generally cost efficient and of a sufficient high quality. Interviews with beneficiaries of the facilities confirm that they were satisfied with the results and there were no complaints during the numerous meetings with larger citizen groups and GP representatives. However, some of the buildings visited could not be fully equipped due to lack of resources, and have also not been used: school library and Block Resource Centre in Barinala under Barghat block and community centre in Magarkata GP.

The RT was informed that the assets created out of the BRGF funds where the prime responsibility of its development lies with the line departments are upon completion transferred to them for operation and maintenance; examples are AWC (child and welfare), sub-health centres (health), class rooms/libraries (education), roads/ culverts/bridge outside the GP habitation (PWD). The operation and maintenance of these assts is met by the line agencies from their annual budgetary allocations. Buildings like GP ghar, community centre and rural roads with in GP area are retained by the GP for maintenance. In case of municipalities and town Panchayats the assets are constructed, and retained by them for operation and maintenance.

2.7 Absorption capacity

Overall a large amount of the sanctioned funds were spent in FY 2007/08 (84%) whereas 2008/09 has been more problematic and significantly delayed. Only 45% of the amount received in FY 2008/09 has been spent up to May 2009. The variation in spending across the districts visited for 2007/08 was 92% in Balaghat District to 86% in Seoni District.

Some of the reasons for non-utilisation of funds have been delays in the finalization of the planning process as the investment priorities from line departments were not available in due time, and as the BRGF grants were supposed to fill out the gaps from these, cumbersome approval procedures (DPC, High Powered Committee, Review at Central level) and delays in funding flows, as several tiers are involved in the transfer of funds.

2.8 Conclusions and Recommendations

Madhya Pradesh though has not prescribed a set criteria for backwardness index yet it has pursued targeting to the vulnerable by providing one ‘Apna Ghar’ (IAY) to every GP under the annual plans. There is a strong need to develop the criteria to index backwardness in order to strengthen the future targeting of backwardness/poverty. Investments funded by the BRGF are generally costs efficient, relevant and with a high number of beneficiaries, and the targeting of the SC/ST groups is adhered, although a detailed connection between backward areas, special needs of various groups and the actual decisions could not be established.

There is a need for strengthening of the targeting in the future planning. The approval procedures, see also the Planning Section and operational delays, cause severe problems in terms of utilization of funds and reduce the possibilities for the PRIs to conduct investments in a timely manner. The delays mean shorter time for project implementation, increased costs of investments and reduced accountability. There is lack of sufficient and timely information about the size of the allocations till such time the funds are transferred from the state and received by the PRIs.
It is impressive that the PRIs have been able to implement large number of development projects within limited time despite delays in approval and transfer steps. It is the general impression that the more than 25,000 projects have benefited a large segment of the population, yet fails to significantly address the regional imbalances with the existing funding level. The convergence is very limited, and most projects are funded solely from BRGF sources.
The RM recommends strengthening the following areas:

• 
  Central: Increase, if possible, the amount of funding available for each PRI, as the present level is the bare minimum for meaningful investments and largely inadequate to address the regional imbalances;
  
• 
  Central: Review the system of requirements for utilization with the aim to ensure that more funds are available in a timely manner for investments;
  
• 
  Central: Reduce the number of approval tiers – see Planning Section and allow the PRIs to make the final decisions with subsequent monitoring and auditing;
  
• 
  Central: Improve the targeting of the allocation of funds across the districts by inclusion of better data on expenditure needs and backwardness;
  
• 
  State: Improve information on allocation of funds and allocation criteria;
  
• 
  State: Insure that funds are broken down clearly for each tier of PRI according to the guidelines of the BRGF.
  

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