Government’s new road-map for corporate-style governance of states


NEW DELHI: In its bid to bring in corporate-style governance, some of the ministries are working on plans to minimise the conventional “fixed entitlement or grant” (financial assistance) under different programmes to states. The new norm for providing more central assistance would be linked to performance and outcome that a state shows, something akin to KRAs (key result areas) specified to employees in corporates.

TOI has learnt that the housing and urban affairs ministry is preparing a roadmap to provide more funds to states that achieve the specific outcomes and not just based on how many projects have been executed. Currently, there are multiple flagship central schemes such as Swachh Bharat, PM Awas Yojna, Amrut, Smart Cities and urban livelihood mission which are being implemented across urban areas. “The plan is to give full liberty to the states to put the numbers of projects they want to undertake in one basket. However, since the Centre is providing financial assistance, they would have to give equal priority to projects or programmes under the central schemes,” said a source.


Similarly, there is a proposal to release funds under the flagship Nal Se Jal scheme to states based on their performance. Sources said the roadmap is to have healthy competition among states to accelerate a programme to meet the targets in time. They added giving incentives to states for better performance has been a successful model and this is likely to be the new normal in the next few years.


The road transport ministry has already finalised the plan to give Rs 7,000 crore incentive grant to 10 states registering high number of road deaths to make the roads safer. While there will be a base grant for all the identified states, which will be based on population, registered vehicles, road length and annual fatalities, every state will be given a score based on effort and outcome. The incentive through grant will be linked to the outcome, which means states that do well in meeting the set targets will get more financial assistance.

The road transport ministry is also likely to come out with a policy to take up highway projects in states where the local government offers to share the cost of land and do away with royalty on construction materials. “States, which get the benefit of improved transportation connectivity will also have to share the cost burden,” said an official.

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