New Delhi:  Rural Development Ministry along with the Planning Commission is mulling a flexi-fund of Rs 40,000 crore, which could be used for various rural development programmes designed by the states according to their needs.

"For the first time, we are putting together a flexi-fund of Rs 40,000 crore that will be available to all states to spend on rural development scheme," Rural Development Minister Jairam Ramesh said addressing a press conference with Planning Commission Deputy Chairman Montek Singh Ahluwalia.

This fund will be available to states from the next financial year till the end of 12th Five Year Plan in March, 2017. The Centre and states will share 70:30 per cent ratio.

"It will be operational only from the next year onwards. My own view is that we should give the maximum flexibility. But this is an issue which will ultimately go for the Cabinet approval," Ahluwalia said.

The Ministry said in a statement that this (flexi-fund) would ensure better targeting and focused projects on state specific priorities and it would also sent a powerful signal about Central Government's commitment to cooperative federalism.

This fund would be available as an additional amount that can be spent either on existing centrally sponsored schemes of the Rural Development Ministry and Drinking Water and Sanitation Ministry.


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