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Fin Min to move some schemes from Non-Plan to Plan to control fiscal deficit
Gross budgetary support (GBS) for Central Plan is likely to see only a modest growth in the Union Budget 2012-13 at the cost of Non-Plan outlay. When already the Plan outlay is expected to see a modest increase this year due to scarce resources a number of social sector ad hoc schemes in the Non-Plan may be shifted to Plan Expenditure.
A senior Planning Commission official told The Pioneer that Finance Ministry has asked the Planning Commission to shift some ad hoc schemes to Plan from Non-Plan. This move will leave more money with the Centre and leave less money with Central Ministries and States for the schemes under Plan outlay, having to fund more schemes with the same money.
According to the sources, apart from social sector schemes, the Finance Ministry has also asked banking capitalisation to be shifted to Plan Expenditure.
The move will help the Finance Ministry to control fiscal deficit in FY2012-13. Though Finance Ministry had targeted fiscal deficit at 4.6 per cent of the GDP in FY2011-12, economists say its likely to be above 5.5 per cent.
There are a number of schemes in education, health and labour for which the Government provides funds under the Non-Plan head. These included provisions made for Kendriya Vidyalyas, Navodaya Vidayalya Samiti, Central Government Health Scheme and Social Security for Employees Pension Scheme.
The Finance Ministry had made an outlay of Rs8,16,182 for Non-Plan and Rs4,41,547 for Plan in FY2011-12. This move will raise concern as it is expected that the modest increase in GBS will take its toll on developmental programmes.
The Government has sent directive to the Plan Panel that even as the outlay is optimized, the politically sensitive flagship schemes like Mahatma Gandhi National Rural Employment Guarantee Act, National Rural Health Mission, Integrated Child Development service, Sarva Shiksha Abhiyan and Mid Day Meal Scheme should be fully met. Experts feel that this could further slow the slowing economy and it would be very difficult to achieve cumulative growth of 9 per cent in the 12th Plan.
The Plan Panel in its communication to the Central Ministries has asked them to prepare their annual Budget proposal for the FY2012-13 starting with an increase of 5 per cent over the current year, with two more alternative scenarios at 10 per cent and 15 per cent.
It is probably for the first time in the recent history that the Plan Panel has proposed a meager hike of 5 per cent. The communique further said that the flagship programs should be fully provided for even in the proposal based on 5 per cent increase in outlay. That means development plans will take a hit. It will leave resources dry for infrastructural projects.
Gross budgetary support (GBS) for Central Plan is likely to see only a modest growth in the Union Budget 2012-13 at the cost of Non-Plan outlay. When already the Plan outlay is expected to see a modest increase this year due to scarce resources a number of social sector ad hoc schemes in the Non-Plan may be shifted to Plan Expenditure.
A senior Planning Commission official told The Pioneer that Finance Ministry has asked the Planning Commission to shift some ad hoc schemes to Plan from Non-Plan. This move will leave more money with the Centre and leave less money with Central Ministries and States for the schemes under Plan outlay, having to fund more schemes with the same money.
According to the sources, apart from social sector schemes, the Finance Ministry has also asked banking capitalisation to be shifted to Plan Expenditure.
The move will help the Finance Ministry to control fiscal deficit in FY2012-13. Though Finance Ministry had targeted fiscal deficit at 4.6 per cent of the GDP in FY2011-12, economists say its likely to be above 5.5 per cent.
There are a number of schemes in education, health and labour for which the Government provides funds under the Non-Plan head. These included provisions made for Kendriya Vidyalyas, Navodaya Vidayalya Samiti, Central Government Health Scheme and Social Security for Employees Pension Scheme.
The Finance Ministry had made an outlay of Rs8,16,182 for Non-Plan and Rs4,41,547 for Plan in FY2011-12. This move will raise concern as it is expected that the modest increase in GBS will take its toll on developmental programmes.
The Government has sent directive to the Plan Panel that even as the outlay is optimized, the politically sensitive flagship schemes like Mahatma Gandhi National Rural Employment Guarantee Act, National Rural Health Mission, Integrated Child Development service, Sarva Shiksha Abhiyan and Mid Day Meal Scheme should be fully met. Experts feel that this could further slow the slowing economy and it would be very difficult to achieve cumulative growth of 9 per cent in the 12th Plan.
The Plan Panel in its communication to the Central Ministries has asked them to prepare their annual Budget proposal for the FY2012-13 starting with an increase of 5 per cent over the current year, with two more alternative scenarios at 10 per cent and 15 per cent.
It is probably for the first time in the recent history that the Plan Panel has proposed a meager hike of 5 per cent. The communique further said that the flagship programs should be fully provided for even in the proposal based on 5 per cent increase in outlay. That means development plans will take a hit. It will leave resources dry for infrastructural projects.
