The Hindu Business Line : Plan panel finalises gross budgetary support

“A decent provision in the GBS for the next fiscal has been made, which is a good start for the second year of the 11th Plan.” – Mr Montek Ahluwalia

New Delhi, Feb. 14 In line with the ongoing Eleventh Five Year Plan (2007-12) remit to ensure “faster, more broad-based and inclusive growth”, the quantum of gross budgetary support (GBS) to different Central sectors/ministries/departments and the support to State/Union Territory Plan for the next fiscal to be incorporated into the Union Budget 2008-09 has been amicably arrived at between the Planning Commission and the Union Finance Ministry.

When contacted, the Plan panel Deputy Chairman, Mr Montek Singh Ahluwalia, told Business Line here that “a decent provision in the GBS for the next fiscal has been made, which is a good start for the second year of the Eleventh Plan”. While refraining from divulging the actual numbers of GBS to the Plan, Mr Ahluwalia said “we are satisfied with the GBS” for the next fiscal.

Sources in the Government recalled that in the current fiscal, the 2007-08 Budget provided Rs 2,03,100 crore by way of GBS, out of which the Central Plan was Rs 1,54,939 crore. They said that as the demand from various Central ministries that run important flagship programmes of the UPA government for funds became strident, the Finance Minister, Mr P. Chidambaram, during his Budget speech last year announced additional Plan allocation, which he termed Plan ‘B’.

Accordingly, he set apart Rs 7,000 crore in order to take new initiatives in critical areas such as agriculture, rural development, health, women and child development, infrastructure and water resources.

As he predicated his additional release for GBS through better tax administration, the tax receipts in the current fiscal was handsomely higher to enable him to redeem his assurance by way of supplementary allocation to GBS subsequently, they said.

Supplementary allocation

Encouraged by the buoyancy in revenue receipts and high growth in the economy for the fourth year in a row, the Plan panel is also pitching its faith firmly on supplementary allocation in the course of next year to the tune of Rs 10,000 crore, out of which Rs 7,000 crore would be set apart for Accelerated Irrigation Benefit Programme, a programme authored by Mr Chidambaram during his first tenure as the Finance Minister under the United Front (UF) Government in the period 1996-98 , the mid-day meal scheme, Sarva Shiksha Abhiyan, higher education, skill development, national rural health mission, national rural employment guarantee programme and Jawaharlal Nehru urban renewal mission and health insurance.

The Plan panel has kept the unallocated Rs 3,000 crore for other departments to be determined on the basis of “perceived priorities and spending capacities” in the course of the next fiscal.

Overall ceiling

The sources indicated that there might be an overall GBS ceiling of Rs 2,40,000 crore for 2008-09, with a supplementary allocation in the course of the next fiscal of an additional Rs 10,000 crore mainly to fund the critical programmes dear to the UPA government for ensuring inclusive growth.

Even as the Plan panel has plumped for priority areas in allocating the available resources, there were already rumblings from key ministries/departments that they have not been funded adequately.

They cited the case of the Integrated Child Development Services (ICDS) in its second phase, which needs more funds if the scheme benefiting women and child development is to be universalised.

But the Plan panel is of the view that the programme itself needs to be rejigged and additional funds could be funnelled in the course of next fiscal once a restructured programme is put in place by the concerned Ministry.

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