Policy Briefs & Reports

Budget Brief 2015-16: Backward Regions Grant Fund

Vikram Srinivas, Avani Kapur

Centre for Policy Research

February 28, 2015

Between FY 2006-07 and FY 2010- 11, allocations for the Ministry of Panchayati Raj (MoPR) more than doubled from 2,000 crore to 5,171 crore. In FY 2015-16, GOI discontinued key schemes run by the Ministry. Consequently, allocations have fallen to 95 crore.
BRGF has been discontinued in FY 2015-16. This brief reviews the performance of the scheme from its launch in FY 2006-07 to FY 2014-15.
BRGF is made up of two components: a) district component covering 272 backward districts across 28 states administered by the MoPR, and b) state component which includes a special plan for Bihar, Odisha and West Bengal, administered by the erstwhile Planning Commission.
Allocations for the state component have more than doubled from 2,130 crore in FY
2010-11 to 5,000 crore in FY 2013- 14. In contrast, allocations for the district component decreased by 45% during the same period.
There are two types of grants released under the district component — a Development Fund (DF) grant and a Capacity Building (CB) grant.
Release of funds has slowed down in the last three years. In FY 2014- 15, only 49% of total entitlements under DF and 21% under CB had been released. In fact, 32% districts got no DF releases in FY 2014-15.
Utilisation of funds under BRGF is high. Between FY 2009-10 and FY 2013-14, on average, 85% of total funds released under the scheme were spent.
Eligible districts received more than 5 times the money through MGNREGS than through BRGF district component.