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Various central ministries/departments failed to utilise over Rs 90,425 crores earmarked exclusively for development of northeast region over the past 25 years. The amount has been accumulated in the Non-Lapsable Central Pool of Resources (NLCPR) created in 1998 for maintaining a central reserve pool of such unutilized fund meant for filling the backlog and gap of basic minimum services and infrastructure in eight North-eastern states.
Official data shows that of the total unspent amount, Rs 14,697 crore accumulated until 2013-14 and Rs 75,728 crores accumulated from 2014-15 till March 31, 2020. Altogether 54 central ministries/departments are mandated to spend 10% of their Gross Budgetary Support (GBS) and the unspent amount gets transferred to the NLCPR account as net accrual fund.
A report of the Committee on Estimates of the Lok Sabha reveals that the Ministry of Development of North Eastern Region (D0NER), the nodal ministry for monitoring and keeping track of expenditure under mandatory 10% GBS by non-exempted ministries/departments, is unable to leverage the unspent amount as the NLCPR fund is a notional fund and maintained on proforma basis. However, at the time of creation of the NLCPR in 1998, it was meant to be a central reserve pool in the public accounts of the central government so that unspent amount do not lapse and gets transferred to the reserve pool.
The report titled “Estimates and Policy Aspects of the Ministry of Development Of North Eastern Region” reveals that except for adjusting expenditure made by the DONER ministry under NLCPR scheme, the Ministry of Finance has not allowed any resources against or out of this pool for funding some important projects of central ministries or departments, which were recommended by the Ministry. The Committee presented its report to the Lok Sabha on December 20, 2022.
Photo: nezine.com
A report of the Comptroller and Auditor General also reveals that a decision of the Union Cabinet in 1998 stipulated that the Ministry of Finance would create a NLCPR in the Public Account of India. “No such Reserve Fund has been created in the Public Account so far and the Ministry has been maintaining this fund merely on Proforma basis. Hence the NLCPR fund maintained under the present arrangement cannot be said to be a non-lapsable fund,” states the CAG report on performance audit on implementation of NLCPR scheme from 2002-03 to 2007-08. The report of the Committee on Estimates reveals that the actual status of NLCPR being only a notional fund has remained unchanged.
These repots bust two myths- existence of a non-lapsable fund exclusively for northeast and the region getting higher allocations of fund for basic minimum services and infrastructure development than what was it’s due.
It was the United Front government headed by H.D. Deve Gowda, which announced in 1996 that ten per cent of the budget of central ministries/departments would be earmarked for development of North-eastern states. The former Prime Minister announced this policy decision after a weeklong visit to the NE states and included it in the “New Initiatives for North Eastern Region.”
The Deve Gowda-government also constituted the Shukla Commission in 1996 to examine the backlogs in basic minimum services and gaps in infrastructure, especially in power, communication, railways, roads, education and agriculture. The Shukla Commission estimated a backlog of Rs 9396 crores and fund requirement to the tune of Rs 93,619 crores for filling the infrastructure gap in the region.
In 1998, the National Democratic Alliance (NDA) government headed by Atal Bihari Vajpayee created the NLCPR. Until 2001, the Planning Commission was the nodal agency for NLCPR projects and schemes. From 2001 September till April, 2004, the Department of Development of North Eastern Region under the Ministry of Home Affairs was the nodal agency. Following creation of the DONER Ministry in May 2004, the ministry has been the nodal ministry for planning, execution and monitoring development schemes and projects in the region. The DONER ministry implements various schemes and programmes including the NLCPR scheme in consultation with the North Eastern Council.
“So far, except for adjusting expenditure made by the Ministry of DoNER under NLCPR scheme, the Ministry of Finance has not allowed any resources against or out of this pool for funding some important projects of Central Ministries or Departments, which were recommended by the Ministry,” the Secretary, DONER informed the Committee on Estimates about the NLCPR fund.
The report adds that the Secretary, DoNER had also stated before the Committee : “As this NLCPR is being maintained on proforma basis and not as a reserve pool in public accounts as was envisaged as per the Cabinet approval or the Budget announcement made by the then Finance Minister in 1998-99, the actual flow of resources from this pool has to happen through annual budgetary allocation by the Ministry of Finance, which can be made in the budget allocations of the Ministry of DoNER.”
Since inception, 1,635 projects worth Rs 16,233 crore have been sanctioned under the NLCPR scheme in sectors like connectivity, roads, bridges, water supply, sewage, health, education, tourism, etc, it adds.
In 2017, the previous NDA government headed by Narendra Modi discontinued the NLCPR scheme and replaced it with the North East Special Infrastructure Development Scheme (NESIDS). Against the projected requirement of Rs 1100 crores under NESIDS, the Budget Estimates for 2022-23 was only Rs 643 crores. The total B.E. under the scheme increased to Rs 1493.30 crores for 2022-23 and Rs 2491 crores for 2023-24.
Myth of Higher allocations
Budget Estimates and Revised Estimates of budgetary allocations to DONER Ministry tell the real story of actual fund flow to the northeast region which is kept hidden in cumulative figures of allocations and utlization. Budget Estimates (BE) for the ministry in 2020-21 were Rs 3048 crores. The Department of Expenditure reduced the allocation by 60% to Rs 1860 crores in the Revised Estimates. For 2021-22, against the DONER Ministry’s projected requirement of Rs 5000 crore, the BE is Rs 2410 crores which was less than BE of 2019-20 and RE and the actual expenditure of 2019-20. For 2022-23, the RE was Rs 2755 crores and for 2023-24, the BE is Rs. 5892.00 crore.
The Ministry informed the Committee on Estimates that it had already taken up the matter with the Ministry of Finance for allowing leveraging of this NLCPR pool “for undertaking certain important projects for the region”. The Ministry, along with NEC, has already got a shelf of projects worth more than Rs. 60,000 crores from the NE States, the report states.
According to the Press Information Bureau, from the Expenditure Profile of Union Budget 2023-24, the 10% GBS share for the NER comes to Rs. 94,679.53 which is 31% higher than the RE 2022-23 allocation of Rs. 72.540.28 crore under 10% GBS share of the 55 non-exempt Ministries/ Departments. How much of this amount is utilized will be known only after the Ministry of Finance finalises the unspent amount under NLCPR net accrual fund.
The parliamentary committee observed in its report that “many of the Ministries/Departments have not spent 100% of their mandatory 10% GBS for NER and that shortfalls have been noticed in all major Ministries. For example, Department of Food and Public Distribution has had shortfalls of Rs. 12,072.89 in 2020-21, Rs.19,037.249 in 2019-20 and Rs. 17,330.5 in 2018-19.”
The concept of non-lapsable fund for northeast got buried in comparative counts of visits by Prime Ministers and Union Ministers to the region during Bharatiya Janata Party (BJP)-led NDA and the Congress-led United Progressive Alliance (UPA) regimes and competitive rhetoric of higher allocations to claim credits for development in the region.
Source: Report of the Committee on Estimates
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