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More funds for social sector likely

The Govt is expected to raise budgetary support by Rs 39K crore and also funds for critical sectors, reports Chetan Chauhan.

business Updated: Feb 22, 2008 23:15 IST
Chetan Chauhan

The government is expected to increase the gross budgetary support (GBS) for the next financial year to Rs 2,44,000 crore, an increase of about Rs 39,000 crore.

In addition to this, if required it is also willing to keep aside Rs 10,000 crore for “certain critical” sectors.

However, many central government ministries are still not happy. The total GBS required to meet the financial demand of the ministries is about Rs 2,88,292 crore, but the government has maintained that the demand could not be met because of fiscal restrictions imposed by the Fiscal Responsibility and Budget Management Act, 2003 (FRBM).

To keep the fiscal deficit within the 3 per cent limit, as prescribed by the FRBM Act, Prime Minister Manmohan Singh has fixed the GBS at Rs 2,44,000 crore.

Although the Central ministries would gain in allocation by 15 per cent, the states would be richer by about 23 per cent more as compared to the last financial year, the planning commission has said. “States are getting higher on account of special allocation for Jammu and Kashmir and Arunachal Pradesh,” the commission said.

The increase of 15 per cent of allocation for Central ministries would mean that 62 per cent of their demand has been met. The major gainers would be 16 ministries, including the agriculture, and health and family welfare, where increase in allocation is over 18 per cent.
For the remaining ministries, the increase is less than 12 per cent. However, the department of atomic energy’s allocation is expected to fall by about Rs 500 crore.

The ministry of human resource development, which has sought Rs 53,305 crore for the next financial year for education, is likely to get only Rs 33,000 crore, which is an additional allocation of Rs 4,626 crore as against the last financial year.

Not happy with the proposed budgetary support, the HRD ministry has asked for an increase of at least be 19 per cent, which is equal to the allocation for the last year. HRD Minister Arjun Singh has already expressed his disappointment on the proposed allocation for minority education saying it was lower than the estimates for the 11 Five Year Plan.

Health Minister A Ramadoss also wants a bigger share. The finance ministry has proposed an increase of 19 per cent in his ministry’s allocation for the next financial year, whereas Ramadoss wants a 30 per cent increase to achieve the 2 per cent GDP target by the end of the 11th Plan.

The commission has, however, put the ball in the ministry’s court saying that achieving the 2 per cent GDP target would be tough since health expenditure as a percentage of GDP in states had been falling.

While the ministry of women and child development gets a huge 29 per cent increase in the proposed budgetary allocation, the ministry has said that the money is not enough to achieve the target of universalisation of integrated child development scheme (ICDS), a flagship programme to improve children nutrition.

The finance ministry plans to allocate Rs 16,000 crore for implementation of the National Rural Employment Guarantee Programme in the next fiscal even though the rural development ministry estimates that Rs 18,500 crore would be required. The commission will provide additional funds once the full expenditure takes place.