News Column

Plan outlay could be hiked by 2 per cent

June 30, 2014

UNION finance minister Arun Jaitley is likely to hike the Plan expenditure on rural employment and health schemes in the Budget for 2014- 15 over what his predecessor P. Chidmabaram had allocated in the Interim Budget for the year.

According to sources, while Jaitley will be doing a tight rope- walk due to the poor state of finances inherited from the United Progressive Alliance ( UPA) government, he is likely to allocate and additional ` 11,000 crore for Plan expenditure. This would be about two per cent higher than the ` 5,55, 322 crore provided by Chidambaram in the Interim Budget.

However, this would make the proposed plan spending for the fiscal year higher by about ` 90,790 crore, or 19 per cent over the revised estimates for 2013- 14.

The plan expenditure, or GBS ( gross budgetary support), is the government spending on social sector schemes such as Bharat Nirman, Rural Employment Guarantee and National Rural Health Mission.

Senior officials said that there is little scope to increase the Plan spending over the last Budget as the government is required to keep the fiscal deficit in check.

According to the latest government data, the fiscal deficit in 2013- 14 stood at 4.5 per cent of gross domestic product ( GDP), lower than 4.6 per cent projected in the revised estimate mainly on account of curbs on government expenditure.

The fiscal deficit, the gap between government's expenditure and revenue, in actual terms was at ` 5.08 lakh crore as against ` 5.24 lakh crore projected in the revised estimates. The UPA government had cut the total Plan expenditure to ` 4,75,532 crore for 2013- 14 compared to the Budget estimates of ` 5,55,322 crore in what was seen as a sleigh of hand to show a lower a fiscal deficit purely for accounting purposes.

It was for second year in a row that the previous government cut Plan spending substantially to keep fiscal deficit under control.

After assuming office in 2004, the UPA government in its regular Budget had pegged the total Plan expenditure at ` 1,45,590 crore as compared to ` 1,35,071 crore provided in the Interim Budget for 2004- 05.

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Source: Mail Today (India)

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