THIRUVANANTHAPURAM: The Industries Department has sought an enhancement in Plan allocation to take up projects proposed for modernisation and restructuring of the public sector, infrastructure development and revival of traditional industries.

Department sources told The Hindu that the current allocation of Rs.910 crore for the industries sector in the Eleventh Plan was insufficient to go ahead with the development projects mooted by the Government. The allotment was only 2.25 per cent of the total outlay of Rs.46, 422 crore. The annual allocation for 2007-08 is Rs.97.3 crore, which is only 1.39 per cent of the total outlay of Rs.6,950 crore.

The department has sent a detailed note to Chief Minister V.S. Achuthanandan and Finance Minister T.M. Thomas Isaac seeking an increase in the allocation to Rs.2,300 crore, which works out to five per cent of the total outlay.

Funds crunch

Majority of the 57 public sector undertakings (PSUs) under the department are in the red and revival plans will have to be shelved for want of funds.

One-time settlement schemes as well as those for reviving the traditional industries like handloom, khadi and cashew and plans to tie up with Central public sector undertakings will be affected due to funds crunch.

The fate of negotiations with banks to garner funds for various projects and setting up of a company for infrastructure development would be affected, sources said.

The allocation to the industries sector has been decreasing steadily, but it escaped attention due to the growth in Plan size. If the allocation in the Eighth Plan was 14.84 per cent of the total outlay, it came down to 7.04 per cent in the Ninth Plan, 5.47 per cent in the Tenth Plan to stand at 2.25 per cent now.

This is feared to have a direct bearing on the plans of the department to step up the pace of industrialisation. The reduction in allocation has come at a time when the department is making an all-out effort to create a favourable milieu to woo investors.

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