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On March 14, 2022 Rajya Sabha discussed the working of the Ministry of Development of North Eastern Region (DoNER). During the discussion, several issues around budgetary allocation, implementation of schemes and connectivity with the North Eastern Region were discussed. The Ministry of DoNER is responsible for matters relating to the planning, execution and monitoring of development schemes and projects in the North Eastern Region. In this blog post, we analyse the 2022-23 budgetary allocations for the Ministry and discuss related issues.
A new scheme named PM-DevINE announced to boost infrastructure and social development
In 2022-23, the Ministry has seen a 5% increase in allocation from the revised estimates of 2021-22. The Ministry has been allocated Rs 2,800 crore which will be used for various development schemes, such as the North East Special Infrastructure Development Scheme and North East Road Sector Development Scheme. A scheme-wise break-up of the budget allocation for the Ministry is given below in Table 1.
One of the key highlights of the Finance Minister’s Budget Speech was the announcement of a new scheme named the Prime Minister’s Development Initiative for North East (PM-DevINE). It will be implemented through the North East Council (nodal agency for the economic and social development of the North Eastern Region). PM-DevINE will fund infrastructure and social development projects in areas such as road connectivity, health, and agriculture. The scheme will not replace or subsume existing central sector or centrally sponsored schemes. The Scheme will be given an initial allocation of Rs 1,500 crore.
Table 1: Break-up of allocation to the Ministry of DoNER (in Rs crore)
|
Major Heads |
2020-21 Actuals |
2021-22 BE |
2021-22 RE |
2022-23 BE |
% change from 2021-22 RE to 2022-23 BE |
|
North East Special Infrastructure Development Scheme |
446 |
675 |
674 |
1,419 |
111% |
|
Schemes of North East Council |
567 |
585 |
585 |
702 |
20% |
|
North East Road Sector Development Scheme |
416 |
696 |
674 |
496 |
-26% |
|
Central pool of resources for North East and Sikkim |
342 |
581 |
581 |
- |
- |
|
Others |
270 |
322 |
344 |
241 |
-30% |
|
Total |
1,854 |
2,658 |
2,658 |
2,800 |
5% |
Note: BE – Budget Estimate; RE – Revised Estimate; Schemes for North East Council includes Special Development Projects.
Sources: Demand No. 23 of Union Budget Documents 2022-23; PRS.
Allocation towards capital outlay less than demand
The Standing Committee on Home Affairs (2022) noted that the amount allocated at the budget stage in 2022-23 (Rs 660 crore) was 17% less than the demand by the Ministry (Rs 794 crore). Capital expenditure includes capital outlay which leads to the creation of assets such as schools, hospitals, and roads and bridges. The Committee observed that this may severely affect the implementation of several projects and schemes that require capital outlay. It recommended the Ministry to take up this matter with the Finance Ministry and demand additional assistance at the revised stage of the 2022-23 financial year.
Underutilisation of funds over the years
Since 2011-12 (barring 2016-17), the Ministry has not been able to utilise the funds allocated to it at the budgeted stage (See Figure 1). For instance, in 2020-21, fund utilisation in case of the North East Road Sector Development Scheme was 52%, whereas only 34% of funds were utilised under the North East Special Infrastructure Development Scheme (for infrastructure projects relating to water supply, power, connectivity, social infrastructure). Key reasons for underspending highlighted by the Ministry include late receipt of project proposals and non-receipt of utilisation certificates from state governments.
Figure 1: Underutilisation of funds by the Ministry since 2011-12
Note: Revised Estimate has been used as the Actual Expenditure for 2021-22.
Sources: Union Budget Documents (2011-12 to 2022-23); PRS.
Delay in project completion
The Ministry implements several schemes for infrastructural projects such as roads and bridges. The progress of the certain schemes has been inadequate. The Standing Committee (2022) observed that the physical progress of many road sector projects under the North East Road Sector Development Scheme is either at zero or in single digit percent in spite of release of the amount for the project. Similarly, projects under the Karbi Anglong Autonomous Territorial Council (autonomous district council in Assam) and Social and Infrastructure Development Fund (construction of roads, bridges, and construction of schools and water supply projects in the North Eastern Region) have seen inadequate progress.
Need to address declining forest cover
The Standing Committee (2021) has also recommended the Ministry of DoNER to work towards preserving forest cover. The Committee took note of the declining forest cover in the North East India. As per the India State of Forest Report (2021), states showing major loss of forest cover from 2019 to 2021 are: (i) Arunachal Pradesh (loss of 257 sq km of forest cover), (ii) Manipur (249 sq km), (iii) Nagaland (235 sq km), (iv) Mizoram (186 sq km), and (v) Meghalaya (73 sq km). The loss of forest cover may be attributed to shifting cultivation, cutting down of trees, natural calamities, anthropogenic (environmental pollution) pressure, and developmental activities. The Committee recommended that various measures to protect the forest and environment must be given priority and should implemented within the stipulated timeline. It also suggested the Ministry to: (i) carry out regular plantation drives to increase forest cover/density, and (ii) accord priority towards the ultimate goal of preserving and protecting the forests under various centrally sponsored initiatives.
Key issues raised by Members during discussion in Rajya Sabha
The discussion on the working of the Ministry of DoNER took place in Rajya Sabha on March 14, 2022. One of the issues highlighted by members was about the Ministry not having its own line Department. This leads to the Ministry being dependent on the administrative strength of the states for implementation of projects. Another issue highlighted by several members was the lack of connectivity of the region through railways and road networks which hampers the economic growth of region. The DoNER Minister in his response to the House assured the members that the central government is making continuous efforts towards improving connectivity to the North East region through roads, railways, waterways, and telecommunication.
Allocation by Union Ministries to the North East
Union Ministries allocate 10% of their budget allocation for the North East (See Figure 2 for fund allocation and utilisation). The Ministry of DoNER is the nodal Ministry that monitors and keeps track of the allocation done by various Ministries. In 2022-23, Rs 76,040 crore has been allocated by all the Ministries for the North Eastern region. The allocation has increased by 11% from the revised estimate of 2021-22 (Rs 68,440 crore). In 2019-20 and 2021-21 the actual expenditure towards North Eastern areas was lower than budget estimates by 18% and 19% respectively.
Figure 2: Budgetary allocation by all Union Ministries for the North East (amount in Rs crore)
Source: Report No. 239: Demand for Grants (2022-23) of Ministry of Development of North Eastern Region, Standing Committee on Home Affairs; PRS.
As of April 13, 2020, there are 9,152 confirmed cases of COVID-19 in India. Of these, 857 patients have been cured/discharged and 308 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 7 and April 13, 2020.
Source: Ministry of Health and Family Welfare, PRS.
Health
Supreme Court orders free testing for COVID-19 and provision of personal protective equipment for healthcare workers
Free testing for COVID-19: The Supreme Court held that COVID-19 tests should be free of cost for persons belonging to economically weaker sections as notified by the government and those covered under the Ayushman Bharat scheme, irrespective of whether they are conducted in private or public laboratories. Further, it held that COVID-19 tests may only be carried out in laboratories accredited by the National Accreditation Board for Testing and Calibration Laboratories, or any agencies approved by the World Health Organisation or Indian Council for Medical Research. Prior to this order, tests were free of cost in government laboratories. However, private laboratories were permitted to charge up to Rs 4,500 per test.
Personal protective equipment for healthcare workers: The Supreme Court held that availability of appropriate personal protective equipment (PPE) for front line healthcare workers must be ensured by the government. PPE includes gloves, masks, goggles, face shields, and shoe covers. Usage of PPE must be based on guidelines provided by the Ministry of Health and Family Welfare and the World Health Organisation. Further, it directed the government to promote domestic production of PPE by means such as allowing movement of raw material. Restriction on exports of PPE may also be instituted.
Security for healthcare workers: The Court also noted that healthcare workers treating COVID-19 patients were facing violence by the public due to stigma associated with their potential exposure to COVID-19. The Court held that states and union territories should direct police authorities to provide security to doctors and medical staff in hospitals, places where persons have been quarantined, and while conducting screening visits. Necessary action must be taken against persons who obstruct and commit any offence in respect to performance of duties by doctors, medical staff and other government officials working to contain the outbreak of COVID-19.
Exemptions from customs duty and health cess for certain items
The central government has exempted the levy of basic customs duty and health cess on certain items. These include ventilators, face masks, PPE, COVID-19 testing kits, and items necessary to manufacture these items. The exemptions will remain in force until September 30, 2020.
Financial Assistance
COVlD-19 emergency response and health system preparedness package
The central government approved the COVlD-19 emergency response and health system preparedness package. It will be implemented in three phases from January 2020 to March 2024. The objectives of the package include: (i) strengthening national and state health systems, (ii) support preparedness for COVID-19, (iii) procure essential medical equipment and drugs, (iv) setting up laboratories for surveillance, and (v) biosecurity.
The Ministry of Health and Family Welfare has initiated release of funds for phase 1 of the programme which will last until June 2020. These funds will be utilised for activities such as: (i) developing hospitals and isolation wards for COVID-19 patients, (ii) providing ventilators, (iii) expansion of diagnostic capacities, and (iv) community surveillance for the disease.
Permission granted for partial withdrawal from National Pension System
Subscribers of the National Pension System may make partial withdrawals to fulfil their financial needs. Withdrawals will be permitted on formal request by the subscriber. Funds may be utilised for the treatment of the illness of a subscriber, his spouse, children (including adopted children), or dependent parents.
All pending income tax refunds up to five lakh rupees to be issued
To provide immediate relief to businesses and individuals, all pending income-tax refunds up to five lakh rupees, will be issued immediately. This is estimated to benefit approximately 14 lakh taxpayers. Further, all pending GST and Customs refunds will be issued. This will benefit around one lakh business entities. The total refund granted will be approximately Rs 18,000 crore.
Compensation for Food Corporation of India Employees in case of death due to COVID-19
The central government has approved the proposal for monetary compensation to 1.08 lakh workers of the Food Corporation of India (FCI) including 80,000 labourers who are working to supply food grains across the country. Currently, families of FCI employees are entitled to compensation in the event of death due to terrorist attack, bomb blast, mob attack or natural disaster. However, the regular and contractual labour of FCI are not covered. Under this proposal, all workers on duty will be insured in the event of death due to COVID-19 between March 24, 2020 and 23 September, 2020. Regular labour will be entitled to 15 lakh rupees, contractual labour will be entitled to 10 lakh rupees, category 1 officers will be entitled to 35 lakh rupees, category 2 officers will be entitled to 30 lakh rupees, and category 3 and 4 workers will be entitled to 25 lakh rupees.
NGOs permitted to buy food grains directly from FCI for relief operations
The government noted that NGOs and charitable organisations are playing an important role in providing food to thousands of poor people during the lockdown. To ensure uninterrupted supply of food grain to these organisations, the central government has directed FCI to provide wheat and rice to NGOs at the Open Market Sale Scheme rate. These rates are generally reserved for state governments and registered bulk users. This implies that these organisations can purchase one to ten metric tonnes of wheat and rice at a time from FCI at the predetermined reserve prices.
Increasing financial resources
Reduction in salaries and benefits to Members of Parliament
The centre issued two Ordinances to amend: (i) the Salary, Allowances, and Pension of Members of Parliament Act, 1954 to reduce the salaries of MPs by 30% for a period of one year, and (ii) the Salaries and Allowances of Ministers Act, 1952, to reduce the sumptuary allowance of Ministers by 30% for one year. The government also amended the rules notified under the 1954 Act to reduce certain allowances of MPs for one year, and suspended the MPLAD Scheme for two years. The MPLAD scheme enables members of parliament to recommend developmental work in their constituencies. These changes are being made to supplement the financial resources of the centre to tackle the COVID-19 pandemic. The proposed reduction to the salaries and allowances of MPs and Ministers amounts to savings of around Rs 55 crore, and the suspension of the MPLAD scheme is expected to save Rs 7,800 crore. These measures comprise 0.03% and 4.5% respectively, of the estimated amount required to fight the immediate economic distress unleashed due to COVID.
For more information on the implications of the reduction of salaries and benefits to MPs, please see here.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
