The Hindu Business Line : Plan panel pitches for higher gross budgetary support

EVEN as the Union Finance Minister, Mr P. Chidambaram, has to do a dexterous balancing act as he is set to present the Government's book-keeping exercise in exactly a couple of months from now, demand for additional resources through budget for bolstering socio-economic programmes has emanated from the Planning Commission.

Sources in the Government told Business Line here that prior to the formal meeting of the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, and Mr Chidambaram to determine the gross budgetary support (GBS) for ensuring timely completion of the process of Plan formulation, senior officials concerned have already set the ball rolling by beginning discussion on the subject.

The sources recalled that in the approach paper approved by the National Development Council (NDC), the GBS to the Tenth Plan has been estimated at Rs 7,06,000 crore for the entire five year span (2002-07) at the base year (2001-02) prices.

For the penultimate year (2005-06) of the Tenth Plan, the GBS required to meet the objectives of the Plan is Rs 1,91,041 crore at current prices, as against Rs 1,45,590 crore for the current fiscal (2004-05) Plan.

But the sources said that in order to achieve the key goal explicitly stated at the inception of the National Common Minimum Programme (NCMP) of the United Progressive Alliance (UPA) Government (i.e. maintaining a growth rate of 7-8 per cent per year for a sustained period, we need to improve the pace of growth by injecting larger public investments in infrastructure sectors), larger GBS is needed.

This needs to be seen, the sources said, in the light of achieving the social and human development indicators as approved by NDC, which are also India's global commitments as part of the Millennium Development Goals (MDGs).

The sources said as the process of recovery of the economy from a prolonged slowdown depends upon a sustained dose of public investment, any reduction in GBS would have an adverse effect on public outlays, especially in key infrastructure sectors such as power, roads and irrigation.

Of the higher GBS sought, from the State sector alone would be substantial against the existing allocation of Rs 57,704 crore, after factoring in the additional requirement for NCMP-related schemes/projects such as accelerated irrigation benefit Programme (AIBP), urban sanitisation mission, backward States grant fund as also the slightly rising inflation factor.

On the Central sector, the NCMP-related schemes such as Sarva Siksha Abhiyan, health (including rural health mission), food for work, mid-day meals, watershed development, rural electrification, railways, roads, plethora of employment programmes, urban water supply/sewerage implementing agencies pitching for higher outlays, adding this to the current year budgetary estimates of Central sectors would render even an estimated requirement of GBS larger.

It is further stated that as next year being the fourth year of the Tenth Plan, the penultimate year is construed a critical one since the lessons or mid-course corrective steps flowing from the Mid-Term Appraisal have to be begun soon.

Hence, any shortfall for a third year in a row would raise questions on the very credibility of the UPA Government's unswerving commitment to the NCMP.

With natural calamity tsunami— a chain of high tidal waves — taking a toll of human lives and causing widespread damage to properties in a few States, provision for relief package by the Centre has also come as an inevitable expenditure, stretching the Centre's finances at the fag end of the current fiscal.

The sources point out that the Finance Minister will have to contend with a litany of demands from various quarters even as the size of the cake remains relatively small with revenue buoyancy equally feeble.