Kerala government to cut 20% plan outlay, raise Rs 2,000 crore

THIRUVANANTHAPURAM: The state government has instructed all the departments to re-prioritise their projects and schemes as part of the decision to cut down the plan outlay by 20%, and suggest new schemes in lieu of existing ones with a focus on reconstruction of the state in the backdrop of the floods.

The finance department has asked all the departments to identify and inform about the schemes to be dropped fully or partially to meet the 20% cut in plan outlay before October 15. Even among the remaining outlay, the finance department has asked the departments to revisit their projects and suggest new schemes instead, with a focus on flood relief, livelihood restoration, rehabilitation, and rebuilding.


According to the order issued by the finance department in this regard, the 20% cut will not be applicable for the public works and water resources departments and the scholarship elements in all the departments. Also, the centrally sponsored schemes including their state share, externally aided projects and Nabard-assisted schemes will not be included in the calculation of the state plan schemes for 20% cut.

The departments have been asked not to include committed expenditure in the list to be given a cut, as such action would only end up in delaying the expenditure. Committed expenditure includes schemes already started, instances where contracts have been awarded, supply of goods or procurement completed but the payment not made, payment of pensions, insurance premium etc. Once all the departments give their lists, the special working group including the finance secretary and the secretary of the concerned department will scrutinize the proposals and will be given green signal to proceed.

Chief minister Pinarayi Vijayan said that the decision to cut down 20% plan outlay would fetch the government Rs 2,000 crore. The state's gross plan outlay for 2018-19 is Rs 37,247.99 crore, of which Rs 8,097.99 crore is the central share of funds. This would mean that the 20% cut would affect only state outlay of Rs 25,915 crore, excluding the central share and outlays for the public works and water resources departments. Also, till date, the remaining 40 departments have already spent Rs 6,463.24 crore, further reducing the available plan funds to Rs 19,452.43 crore. In short, excluding the committed expenditure, spent funds, scholarship elements and the central share, the government can rework the plan projects with a 20% cut only for the remaining funds, finally fetching the government approximately Rs 2,000 to Rs 2,500 crore.