Wednesday, September 12, 2007

Development project in Naxal area: a flawed concept

in New Delhi

The Government of India's efforts to accelerate development in naxal-affected districts seem to have fallen flat.

IN 2003, when the Government of India identified 55 districts affected by left-wing extremism (naxalism) across nine States to address the issue of backwardness, its decision stemmed from the realisation that people were drawn into naxalism and forced to take up arms in order to meet their socio-economic needs. These districts are in the States of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Maharashtra, Madhya Pradesh, Orissa, Uttar Pradesh and West Bengal.

The objective was to accelerate the development process in these districts and ultimately prevent people from joining the naxalites. The pursuit of this goal warranted a certain degree of commitment on the part of the States concerned. But has the effort succeeded?

Even as the scheme progressed, it revealed an in-built flaw. While the identification of the districts affected by extremism was carried out by the Ministry of Home Affairs in terms of the number of violent incidents, these districts were clubbed with the Backward Districts Initiative (BDI) under the Rashtriya Sam Vikas Yojana (RSVY) being run by the Planning Commission. The RSVY has three components: the BDI, a Special Plan for Bihar and a Special Plan for the KBK region of Orissa (the undivided districts of Koraput, Bolangir and Kalahandi, which have now been divided into eight districts). Its objective was to address the problems of low agricultural productivity and unemployment and to fill critical gaps in physical and social infrastructure. Under the BDI scheme, programmes and policies were to be initiated jointly by the Centre and the States to remove barriers to growth, accelerate development and improve the quality of life of people.

The BDI component was to cover 100 districts. The identification of backward districts within a State was made on the basis of an index of backwardness comprising three parameters with equal weightage: (i) value of output per agricultural worker; (ii) agriculture wage rate; and (iii) percentage of the Scheduled Caste and Scheduled Tribe population of the districts.

Thirty-two of the 55 districts identified to have been affected by extremism did not satisfy the above criteria of backwardness. It showed that in terms of ranking, these naxal-affected districts would not strictly qualify to be labelled as backward districts. Still, these districts were brought under the BDI in the hope that State intervention would help them overcome major bottlenecks in development, and make a dent in poverty in a time-bound manner.

This was a basic flaw as the development paradigm (rather than the rights paradigm) has been found to be unsuitable to formulate an effective response to naxalism. At the end of three years, major bottlenecks in development remained unresolved in these districts, and the States concerned appeared less than enthusiastic in tackling poverty within a specific time frame. The sense of urgency was not visible on the ground, thus defeating the very objective of this mission approach to development.

Nevertheless, the implementation of the scheme needs to be closely examined as it throws light on the lack of seriousness of the stakeholders in realising its objectives. A sum of Rs.15 crore a year was to be provided to each of these districts for three years. That is, a total of Rs.45 crore for a district. The scheme envisaged release of funds by the Centre to the State governments on a 100 per cent grant basis, in suitable instalments linked with the satisfactory progress of the three-year Master Plan and nested Annual Action Plans to be prepared by district administrations and panchayati raj institutions.

The scheme also required the State governments to release the funds received under the programme, within 15 days of receipt, to a separate head created for the purpose under the District Rural Development Agency. Failure to do so would lead to forfeiture of subsequent instalments and the funds released earlier would be treated as a loan, according to the scheme's guidelines laid down by the Planning Commission. A Memorandum of Understanding (MoU) between the Planning Commission and the State government governs the implementation of the scheme.

The financial assistance provided to the districts under the scheme may be insignificant, but it could well be considered as a test case to see whether the development paradigm could help tackle naxalism. An interim review by the Planning Commission in 2005 revealed that there were many defaulting States. Expenditure by the States/districts on the earmarked schemes was found to be not up to the mark. The 2005-06 period was the last year of the scheme when the entire balance amount of Rs.3,000 crore would have been released to the States. Yet, the Planning Commission noted with dismay on November 21, 2005, in an internal note, that the States had so far been indifferent – they had not made requests for further release of funds after exhausting the earlier instalments.

The table compiled by the Planning Commission on the release of funds to the States and the cumulative expenditure reported by the State governments as on October 5, 2005, for the first two years revealed the extent of indifference. It showed that even as the Government of India was keen that regional imbalances should be removed, the State governments were not serious enough and approached the issue in a routine way. The implementation of the schemes was slow and, as a result, the release of further instalments to the States was delayed.

The latest table on the release of funds to States for RSVY, as carried in the Ministry of Panchayati Raj's website, shows some improvement in the cumulative expenditure reported by the State governments at the end of the fourth year (2006-07), but there is still a huge amount to be released to the States under the scheme. This has not yet been released because of the poor utilisation of the funds released earlier.

It is easy to infer that the States probably found it difficult to utilise the funds in the naxal-affected districts because of a security threat from the naxalites if they went ahead with implementation of the development programmes. But statistics suggest the contrary. In Chhattisgarh, most of the naxalite-affected districts have reported better utilisation of funds compared with other districts. In Bastar – a naxalite-affected district – the entire Rs.45 crore has been released by the Centre, with the State government reporting a cumulative expenditure of Rs.27.26 crore. In Dantewada, another affected district, the Centre has released the entire Rs.45 crore, with the cumulative expenditure in the district showing Rs.30.37 crore. Kanker district is another success story: here the cumulative expenditure shows Rs.35.62 crore out of the sanctioned Rs.45 crore.

These figures may be compared with other districts in the State receiving funds under the RSVY. In Bilaspur district, only Rs.37.50 crore has been released, while the cumulative expenditure out of this sanctioned amount stands at Rs.27.07 crore.

It is instructive to further compare the figures for Chhattisgarh with those of Andhra Pradesh. Chittoor and Vizianagaram – both non-naxalite districts in Andhra Pradesh – reported cumulative expenditure of just Rs.12.06 crore and Rs.7.50 crore respectively. Similar examples abound in other States.

With the underutilisation of funds by the States, the scheme has been continued through 2006-07 and beyond, until the earmarked amount is fully released to each district. These districts would then shift to the newly-launched Backward Regions Grant Fund's (BRGF) standard mode of funding. The BRGF scheme covers 250 districts and is to be administered by the Ministry of Panchayati Raj.

The Ministry of Home Affairs' annual report for 2006-07 reveals that financial assistance of Rs.2,475 crore was provided to the naxal-affected States under the scheme to fill in critical gaps in physical and social infrastructure. Only a final appraisal by the Planning Commission could reveal how this money has been spent and whether it had any impact on the causes of naxalism.

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