The Hindu : Front Page : Local bodies not to get asset fund

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Sunday, Dec 20, 2009
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Local bodies not to get asset fund

Girish Menon

Asset Maintenance Fund is available only for government-owned institutions

Fund constituted with Rs.136-crore corpus
Panel to choose projects to be taken up

Thiruvananthapuram: Government institutions transferred to local bodies under the panchayat and municipal laws will not get any assistance from the recently established Asset Maintenance Fund.

The State government has made it clear that the fund will be available only for government-owned institutions for maintenance of existing assets as per the scheme formulated a few months ago. Local bodies, autonomous institutions and public sector undertakings are not eligible for the aid. The new eligibility norms have been introduced in view of a large number of proposals received from these institutions, according to government sources.

The Asset Maintenance Fund (AMF) was established in August this year replacing the Asset Renewal Fund primarily for financing renovation and maintenance of government hospitals, schools, colleges, anganwadis, hostels and police stations. The government had also constituted a nine-member State-level committee, headed by the Additional Chief Secretary (Finance-Expenditure), to process proposals under the AMF.

The new norms take away certain powers of the respective departments, making it mandatory for all proposals to be scrutinised and approved by the Finance Department before being considered by the State-level committee. The rules have been made tighter, with the onus on the respective administrative departments to provide detailed estimates of their project proposals, besides setting up a monitoring mechanism. The respective departments can issue administrative sanction only with the committee’s approval and in concurrence with the Finance Department, sources said.

The AMF had been constituted with a Rs.136-crore corpus from the balance funds remaining with the discontinued renewal fund. The Finance Minister had announced that there would be no restrictions on budget allocation for valid project proposals. Under the scheme, the committee will have the powers to choose the projects to be taken up for maintenance and renovation, utilising not only the corpus fund, but also outside funding. The committee can decide the pattern of funding for maintenance of assets of primarily eight departments, including Revenue, General Education, Health, Taxes, Home, Social Welfare and Civil Supplies.

The AMF scheme had been widely welcomed particularly in the context of lower budget allocation for maintenance of physical and infrastructure assets created over the years. However, the decision to keep the local bodies out of the purview of the AMF, according to sources, cannot be justified because a majority of the institutions such as lower and upper primary schools, public health centres, anganwadis, etc, are now with the local bodies.

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