The Backward Regions Grant Fund Programme (BRGF), launched by the Prime Minister at Barpeta in Assam on 19th February 2006, signifies a new approach to addressing persistent regional imbalances in development. The programme subsumes the Rashtriya Sama Vikas Yojana (RSVY), a scheme earlier being administered by the Planning Commission. The BRGF Programme covers 250 districts in 27 States, of which 232 districts fall under the purview of Part IX and Part IX-A of the Constitution dealing with the Panchayats and the Municipalities respectively.

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The remaining 18 districts are covered by other local government structures, such as Autonomous District and Regional Councils under the Sixth Schedule of the Constitution and state specific arrangements as in the case of Nagaland and the hill areas of Manipur. The list of districts covered under BRGF is at Annexe 1. 2. The BRGF programme represents a major shift in approach from topdown plans to participative plans prepared from the grassroots level upwards.

Panchayats at the Village, Intermediate and District levels and Municipalities, constituted under Parts IX and IX-A of the Constitution, are positioned as institutions for planning and implementing the programme. The conviction that drives this new locally driven approach is that grassroots level democratic institutions know best the dimensions of poverty in their areas and are, therefore, best placed to undertake individually small, but overall, significant local interventions to sustainably tackle local poverty alleviation 3.

While recognizing the comparative advantage of local bodies in better tackling local matters, all backwardness cannot be handled this way. Therefore, the guidelines of the programme entrust the central role in planning and implementation of the programme to Panchayats in rural areas, municipalities in urban areas and District Planning Committees at the district level constituted in accordance with Article 243 ZD of the Constitution to consolidate the plans of the Panchayats and Municipalities into the draft district plan.

Special provisions have been made in the guidelines for those districts in J&K, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura which do not have Panchayats, where village level bodies and institutions mandated under other frameworks such as the Sixth Schedule are to plan and implement the programme. 1 4. There are three features of BRGF that make it truly unique among central initiatives to combat backwardness.

First, the approach of putting the Panchayats and the Municipalities at the centre stage of tackling chronic regional backwardness is one that has never been tried at this vast scale, save the implementation of NREGA. Second, no Central funding stream is as ‘untied’ as the BRGF – the funds can be applied to any preference of the Panchayat/ Municipality, so long as it fills a development gap and the identification of the work is decided with peoples’ participation. Third, no other programme spends as much funds, nearly 11 percent of the total allocation, for capacity building and staff provisioning.

District planning, which commences from the level of each local body and is finally concluded at the district level through the consolidation of these local Panchayat and Municipality based plans by the District Planning Committee into the draft district plan, is expected to better strategise both local and more wide ranging interventions into a composite strategy document. 6. The importance of this exercise cannot be under-estimated – considerable resources are available today through a host of Central and State schemes for poverty alleviation, infrastructure development and improvement of service delivery.

However, when these are planned for, spent and monitored in vertical silos with little convergence, the results are usually sub-optimal. For instance considerable funds are available under the National Rural Employment Guarantee Scheme, the National Rural Health Mission, ICDS, Sarva Shiksha Abhiyan, Mid Day Meal Programme, Drinking Water Supply and Sanitation Programme, Pradhan Mantri Grameen Sadak Yojana, Irrigation Development and the Rashtriya Krishi Vikas Yojana. The BRGF intends to review all this with a view to ensure that all such resources are utilized most efficiently.

As the BRGF funds are to be used for supplementing and converging existing developmental inflows into identified districts, it breaks out of the mould of programme-wise planning. For its implementation, BRGF does not mandate the preparation of a BRGF plan, but of a district plan which takes into account all flows of funds. Once such a plan is prepared, the gaps that are not met through other sector specific programmes are identified and met through the application of BRGF funds.

Creation of capacity for effective planning at district and lower level is a key-pre-requisite to participative planning. Hence the BRGF contains a specific component for the capacity building of Panchayati Raj Institutions of Rs. 250 crore per year. A framework that looks upon capacity building in a very 2 comprehensive fashion, encompassing training, handholding and providing ongoing support to Panchayat elected representatives has been developed for States to follow, while undertaking capacity building. .

The planning process under BRGF is based on the guidelines for district planning issued by the Planning Commission in August 2006 and January, 2009. The process of integrated development will commence with each district undertaking a diagnostic study of its backwardness and a baseline survey by enlisting professional planning support, to be followed by a well-conceived participatory district development perspective plan to address this backwardness during the period of the Eleventh Five Year Plan.

Such plans will integrate multiple programmes that are in operation in the district concerned and therefore address backwardness through a combination of resources that flow to the district. This will be done without giving any schematic overlay to BRGF that would be subversive of the principle of local prioritization in planning. Programmes identified for implementation under the Fund will be selected through people’s participation, particularly through Gram and Ward Sabhas in the rural areas and Area Sabhas and Ward Committees in the urban areas.

Participatory plans will be prepared in each Panchayat and Municipality, which would take into account all resources being spent in the area of the Panchayat, covering sectoral and district segments of the State Plan, Centrally Sponsored Schemes (particularly the Flagship programmes), fund inflows on account of the National Employment Guarantee programmes, tied and untied grants from Central and State Finance Commissions, and fund inflows on account of the Bharat Nirman Programme. 9. Formula for inter-se allocation of BRGF Fund to Panchayats/ Urban Local Bodies (ULBs) within the Districts: 9. A key design feature under BRGF is that in the interests of certainity and consistency, each State is to indicate the normative formula that will be used for the allocation of BRGF funds to each Panchayat and ULBs. This formula would consider the share of each local self-government institution category (Panchayats or Municipalities) within the district as also within the overall allocation made for each category, the norms governing the inter-se share of each Panchayat or Municipality concerned.

Flexibility is given to States to determine the components that could go into the formula, which may include any index that is prepared and accepted within the State which reflects backwardness or level of development, addressing specific district-wise priorities 3 identified in the district visioning exercise and a separate component that may be separately earmarked as performance incentives, based on specified criteria.

The High Powered Committee is also required to review the functioning of quality monitoring system instituted for the works taken up under the programme. 10. 3 A nominee of the Ministry of Panchayati Raj, usually of the rank of Additional Secretary or Joint Secretary, participates in the meeting of HPC and provides the input of the Ministry with reference to the adherence of the plans to the participatory and planning processes of the programme guideline. The State HPC is the final authority to approve and recommend the plans for release of funds.

The grants are released by the Ministry after the due process of consultation with the Integrated Finance Division. 11. Special provisions for States and Districts not covered under Parts IX & IX-A of the Constitution: Special provisions have been made in the guidelines for the districts/ areas in the States of J&K, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura which do not have Panchayats. The traditional village level bodies and 4 institutions in these districts will plan and implement the programme in these areas.

These special provisions are based on the report of the Expert Committee constituted by the Ministry of Panchayati Raj on Planning for the Sixth Schedule Areas and those areas not covered by Parts IX and IX-A of the Constitution chaired by Shri V. Ramachandran. 12. Fund Flow Mechanism and Tracking of Funds under the BRGF. All funds sanctioned by Ministry of Panchayati Raj under the Programme are transferred to the Consolidated Funds of the State Government concerned.

These funds are required to be transferred to the Panchayats and Municipalities by the State Governments within 15 days of the release funds to the Consolidated Fund following the same pattern, as in the case of transfer of Twelfth Finance Commission Grants. States have been requested to adopt the mechanism of bank transfer suggested by the Task Force of the Ministry of Panchayati Raj which was set up to study the feasibility of rapid transfer of funds through banks to the Panchayats.

The Ministry has communicated to the States its decision of imposing penal interest as per the RBI Bank Rate for delayed transfer of BRGF funds from the Consolidated Fund of the States to the implementation authorities, viz. Panchayats and Municipalities. The penal interest will be credited to the accounts of the implementation authorities. 13. Progress under the programme 13. 1. Allocation and Expenditure from 2007-08 to 2009-10 The annual allocation under BRGF is Rs. 4670 crore of which Rs. 250 crore is towards Capacity Building and the remaining is substantially untied fund as Development Grant.

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