The State government will have to revisit the sectoral fund ceilings set for local bodies and also prompt them to defer capital expenditure for at least a year to channelise maximum resources for bolstering health care infrastructure facilities in the wake of the COVID-19 outbreak.
Other than 25% of the Plan funds, 9.5 % of the State’s revenue is being religiously apportioned to local governments for meeting their committed expenditure, comprising salary and administrative costs and also for constructing and maintaining roads and buildings.
In the present context, a cut in Plan size will eventually have its impact on the allocation down the line, but the State’s share may remain untouched.
The resource crunch triggered by the virus spread will force the government to take a more realistic view on the Plan size and route more funds for enhancing the health care facilities and educational infrastructure facilities.
Local Administration Department sources told The Hindu that considering the huge spurt in revenue expenditure, local governments would have to defer projects for constructing roads and similar facilities at least till the State succeeded in containing the damage incurred by the virus spread.
More accent will have to be laid for using the Mahatma Gandhi National Rural Employment Guarantee Scheme for asset creation and also for planned investment in agriculture and animal husbandry sectors.
Though the State has set a remarkable record in executing the job scheme, it needs to be optimised further by creating durable public assets for posterity. This could be done without upsetting the job component through meticulous planning and execution.
Given the volume of funds expended through the job scheme in the State, it could be used for enhancing public facilities. It will also increase the spending capacity of the rural poor and activate the local economy. In the current context, the Centre may not slash the allocation for the scheme, according to sources.
If the community-based interventions made by local governments for complementing the government’s virus containment efforts is any hint, they could resort to more such service activities that will not incur additional financial burden and also raise the goodwill among the public.
There is a crying need for such a reorientation and it may come up for active consideration of the government soon, sources say.