Congress senior leader and Rajya Sabha MP Jairam Ramesh on Monday alleged that the Centre’s proposed Village and Block Grant for Rural Growth (VBG-RAMG) marked a departure from the rights-based framework of MGNREGA and amounted to another blow to India’s federal structure.
Drawing a distinction between the two schemes, Ramesh said the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was a demand-driven programme backed by a legal guarantee from the Union Government, whereas the proposed VBG-RAMG would be an allocation-based scheme with a fixed cost-sharing arrangement between the Centre and the states.
Under the new model, he said, 60 per cent of the expenditure would be borne by the Centre while states would be required to contribute the remaining 40 per cent.
Ramesh further objected to the Centre’s decision to use the same formula adopted by the 16 Finance Commission for distribution of tax revenues among states to determine allocations under the scheme.
”The normative allocation formula being adopted is the same that the 16 Finance Commission used to distribute the single divisible pool of taxes amongst states. The Finance Commission formula is for distributing revenues, not underwriting expenditures,” he said.
The Congress leader argued that grants were intended to support expenditure obligations and pointed out that most such grants had been discontinued following the recommendations of the 16 Finance Commission.
”Ensuring equity through an efficiency formula is yet another assault on the already fragile fabric of our federalism,” Ramesh said.
