Ahead of the upcoming union budget, New Delhi-based non-governmental organisation Centre for Budget and Governance Accountability (CBGA) has come out with a background note on rural development and panchyati raj institutions (PRIs).

In its to-do list for the FM, it advocates, among others, a cap on the number of days of employment being provided through MGNREGA; additional budgetary provisions for facilitating social audits and management of information and communication infrastructure in the scheme; and significantly higher magnitude of budget outlay for Indira Awaas Yojna.

Following is the complete list of the CBGA's demands:

•    There should be realistic indexation of minimum wages to inflation and in this context, it is important that real wages under MGNREGA must not be frozen. Also since MGNREGA is a demand driven scheme, the government must put a cap on the number of days of employment that are being provided through the scheme. 

•    Review of the implementation of MGNREGA indicates a number of problems in several states, which include—infrastructure and human resource gaps at the gram panchayat level, lack of awareness about the provisions in the scheme among workers and weak grievance redressal system. The union government should take appropriate steps for addressing these problems, some of which would necessarily require additional budgetary support. Also additional budgetary provisions should be made for facilitating social audits and management of information and communication infrastructure in MGNREGA.

•    The Indira Awaas Yojna (IAY), one of the prominent interventions of the union government for rural development, provides financial assistance for construction of dwelling units for shelter less rural below poverty line households. In 2010-11, the amount of assistance per dwelling unit construction through IAY was increased from Rs 35000 to Rs 45000 for new construction in plain areas and from Rs 38500 to Rs 48500 for new construction in hilly areas. However the total union budget outlay for this scheme has witnessed increase from Rs 8800 crore in 2009-10 to Rs 10000 in 2010-11 which implied lack of effort on the part of the government to expand the overall coverage of IAY in 2010-11. In this context the government needs to ensure significantly higher magnitude of budget outlay for IAY in 2011-12 in order to ensure a much greater coverage of the scheme.

•    The basic objective of the 73rd constitutional amendment was to provide panchayati raj institutions (PRI) a degree of financial autonomy for formulating and implementing policies with regard to the various functional responsibilities assigned to them. But in reality, across a number of states the fiscal space available to PRIs had shrunk during 1998-99 to 2002-03, the latest period for which evidence is available. Total expenditure of PRIs as a proportion of combined expenditure of union, state, and local governments in the country had declined from 3.9 percent in 1998-99 to 3.5 percent in 2002-03. In this context it is pertinent that the share of the PRIs in the consolidated public expenditure in the country should be increased to at least 10 percent in 2011-12. In this regard the total funds allocated to the plan schemes of the union ministries, at least 30 percent of the funds should be devolved to panchayats through the state governments and these funds should be given as united resources for panchayats.

•    There is need to prioritise interventions for disadvantaged sections of the population like women children and disabled persons among others within the unified pool of funds devolved to the PRIs. Appropriate guidelines in this regard should be developed and implemented by the PRIs across the country.

•    Special budgetary provisions should be made for strengthening peoples planning through panchayats in all states. The government should also take steps for strengthening the process of decentralized planning in the development scheme of all unions ministries/departments with adequate involvement of PRIs

•    Budgetary support is also required for setting up monitoring and grievance redressal mechanisms like ombudsman for panchayats in all states.

•    The government also needs to provide adequate funds for putting in place a comprehensive and regular capacity building programme for members of the PRIs, standing committees and panchayat functionaries at various level. Such capacity building programmes should include exposures visits, peer learning opportunities, sharing of good practices, developing manuals and awareness generation efforts on the programme implemented by the PRIs.