The Hindu Business Line : Modest hike in Central Plan outlays in real terms

THE Budget has proposed a modest increase of barely 5 per cent in the Central Plan outlay for the current fiscal, after deflating the prevailing inflation rate, which is close to 6 per cent on an annualised basis.

While presenting the Budget in Parliament, the Union Finance Minister, Mr P. Chidambaram, said that the Central Plan outlay for the current fiscal has been pegged at Rs 1,63,720 crore, against the budgeted Rs 1,47,893 crore, which gives a nominal increase of 10.7 per cent.

But given the inflation rate that is close to 6 per cent, the real increase in Central Plan outlay is hardly 5 per cent. However, if the budgeted Central Plan outlay for 2004-05 is compared to the revised estimates of 2003-04 which were shown at Rs 1,41,776 crore, the increase in Plan outlay appears relatively high at 15.49 per cent in nominal terms and in real terms close to 10 per cent.

Among the major heads of Central Plan outlays, the major fell rather heavily on communications as the outlay on this sector was scaled down from Rs 12,860 crore (revised) in 2003-04 to Rs 11,730 crore budgeted for the current fiscal.

Of this, the outlay for the Department of Posts is Rs 190.44 crore and the Department of Telecommunications is Rs 11,660 crore, comprising Rs 175 crore of budgetary support and Rs 11,585 crore of internal and extra budgetary resources (IEBR) — Indian Telephone Industries (Rs 120 crore), Mahanagar Telephone Nigam Ltd (Rs 2,557 crore) and Bharat Sanchar Nigam Ltd (Rs 8,809 crore).

In other important sectors, the outlay for 2004-05 showed increases ranging from modest to moderate as compared to the budgeted outlays of the previous year.

Thus, in agriculture and allied activities, the Plan outlay is Rs 4,643 crore against budgeted Rs 3,866 crore in 2003-04, in rural development at Rs 9,239 crore against Rs 8,181 crore but the revised estimates for 2002-03 being at Rs 13,238 crore; in energy from Rs 43,379 crore last year to Rs 46,788 crore; in industry and minerals from Rs 7,598 crore to Rs 8,349 crore; science and technology and environment from Rs 4,696 crore to Rs 5,644 crore; transport from Rs 28,784 crore to Rs 30,696 crore even as the revised estimate for 2003-04 showing this at Rs 25970 crore.

In tune with the National Common Minimum Programme (NCMP) commitment to give higher allocation to education, the Central Plan under social services has accorded higher priority to human resource development. Thus, a total Plan allocation of Rs 6,000 crore has been made in 2004-05 for elementary education and literacy.

The important Plan schemes include: Restructuring and Reorganisation of teacher education (Rs 207 crore), district primary education programme (Rs 600 crore), national programme of nutritional support to primary education (Rs 1675 crore) and Sarva Shikhsa Abhiyan (Rs 3057.08 crore) and adult education (Rs 250 crore).

Outlay for secondary and higher education is pegged at Rs 2,225 crore.

The Finance Minister said "empowering the people, especially the poor, with universal access to education and health and facilitating their full participation in the growth process through gainful employment, will enhance their full participation in the growth process through gainful employment, will enhance their welfare."

Stating that "in our scheme of things, the poor will have a first charge not only on the additional sum of Rs 10,000 crore of gross budgetary support that I propose to provide today," but also on the entire Plan funds that the Planning Commission would reallocate. Mr Chidambaram also hoped that the newly-constituted Planning Commission would bring "some order into the tangled web of schemes."

He said that the NCMP requires that all Centrally-sponsored schemes, except national priority areas such as family planning shall be transferred to the States.

While the total budgetary support for the Central Plan for the current fiscal is pegged at Rs 87,886 crore as against budgeted Rs 72,152 crore and the revised estimate of Rs 72,847 crore in 2003-04, the total Central Assistance for State and Union Territories Plans is estimated to be at Rs 57,704 crore, as against budgeted Rs 48,822 crore and revised estimate of Rs 48,660 crore.