The Hindu : Step-motherly treatment, says Govt.

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Sunday, Feb 08, 2004

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Step-motherly treatment, says Govt.

By Mahesh Vijapurkar

MUMBAI, FEB. 7. When the Chief Minister, Sushilkumar Shinde, and a team comprising his Cabinet colleagues was meeting the Deputy Prime Minister, L.K. Advani, in New Delhi, demanding funds for tackling a severe drought in Maharashtra , the Nationalist Congress Party's State chief, R.R. Patil, sat on a dharna here yesterday, clearly bringing the Centre's "step-motherly treatment" to the State into the realm of electoral politics, now that the Lok Sabha polls are round the corner.

Mr. Patil says the "paltry Rs. 44 crores given so far should be returned forthwith to the Centre" to expose its unhelpful attitude towards Maharashtra simply because it is ruled by a non-BJP dispensation. On the other hand, the BJP's assertion is that Maharashtra has been given foodgrains worth Rs. 316 crores but "that has not been distributed to the beneficiaries" and the "Centre is being blamed."

Maharashtra has asked for 10-lakh tonnes of foodgrains. The Shiv Sena has asked for a Rs. 2,000-crore package but the BJP points out that the Congress (I)-NCP has got it all wrong. It has ignored, for instance, the grant of Rs. 129 crores from the drought mitigation fund and Rs. 70 crores from the National Calamity Fund. That nothing much is likely to come its way is clear to the NCP-Congress(I) and hence it has decided to showcase the "Centre's irresponsibility towards Maharashtra."

However, Maharashtra has not explained how and why it included a huge chunk of Rs. 725 crores in its bill to the Centre on employment generation in the Rs. 1,708-crore package demanded by its own statutes. Maharashtra collects a special levy from its employees in the formal and organised sectors to fund jobs-on-demand to unskilled labour during droughts. This job creation is being done through the Employment Guarantee Scheme since 1972.

It claims that as of two weeks ago, Maharashtra had spent Rs. 1,072 crores, including Rs. 725 crores on EGS-related activity, a fact confirmed by Mr. Shinde at an official weekly briefing to the media after a Cabinet meeting. If that were so, and Maharashtra has received only Rs. 44 crores from the Centre, the best claim for reimbursement so far can be only Rs. 303 crores. The absurdity of the claim for EGS activity lies in the fact that in the case of Maharashtra, as of end 2003 fiscal, the opening balance in the EGS Fund was Rs. 5,367 crores. There is no official explanation as yet as to why Maharashtra has a huge unspent fund, built over the years through a special tax on employed persons. By statute, it has to make a matching contribution and the funds, if diverted to other activity, has to be limited to job generation alone by other departments but that should be refunded within the same year, or at worst, the next fiscal.

Sources told The Hindu that such matching contributions have not been made for years. The Comptroller and Auditor-General of India has pointed out recently that the expenditure on the EGS has invariably been lower than the net proceeds of the tax it levies.

That helped build the huge corpus, which authoritative sources agree, if spent properly and judiciously and by re-designing the EGS, can "build huge employment possibilities even for the educated, not just the unskilled jobless."

Diversion of funds has traditionally been a norm, sometimes for giving special grants to sugarcane growers when they have a surplus crop which could not be crushed by the cooperative sugar factories. "EGS has been a cash cow," an official conceded. As long as some jobs are provided during distress times no one questions the Government.

Sources say that a major part of the funds, if not entire corpus, "may have been diverted over a period of time." Given most of its poor finances, it may have been used up for other expenditure and now the State is forced to try and pass the burden to the Centre. If the Centre has been lukewarm so far, it is because it may be aware of "this subterfuge."

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Step-motherly treatment, says Govt.