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Nothing big coming except stimulus withdrawal

Don’t expect big-ticket schemes in the budget 2011 but the surprise can be measures to initiate withdrawal of stimulus package worth Rs 20,000 crore announced during 2008-09.Chetan Chauhan reports.

business Updated: Jan 16, 2011 00:37 IST
Chetan Chauhan

Don’t expect big-ticket schemes in the budget 2011 but the surprise can be measures to initiate withdrawal of stimulus package worth Rs 20,000 crore announced during 2008-09.

The Planning Commission has told all the Central government ministries that no new schemes will be considered for the budget except those, which got in principle approval in first half of 2010.

“We are in the last year of the 11th five year plan and we want to consolidate on the schemes launched during the period,” said a senior plan panel official. “No use in launching new schemes now. They can be considered for the 12th plan (starting in 2012-13)”

As a result, the panel has rejected proposals for at least 15 new schemes submitted by different ministries. Some of these schemes were part of the 11th plan but the ministries failed to deliver the framework to launch them.

One such programme was job guarantee for poor in urban areas on the lines of Mahatama Gandhi National Rural Employement Guarantee Scheme. But, there was no consensus on the model to implement the scheme.

“The job card model applicable in rural areas will not work due to fast changing demographic nature of urban poor areas,” the official said. In addition, questions are also being raised whether such a scheme is needed in urban areas, as even in rural India the average employment being given is not more than 50 days.

A possible impact of rejection of new schemes would be that many ministries would not witness a substantial increase in their allocation from additional 15 % expected in the Gross Budgetary Support for next budget.

Plan panel officials said performance of many of the social sectors ministries such as Women and Child Development (implementing agency for Rs 10,000 crore Integrated Child Development Scheme), Rural Development (in-charge of Rs 39,100 crore MGNREGA) and Social Justice and Empowerment (runs schemes for welfare of dalits) has not been very good on utilization of funds.

A ministry, that has performed well on fiscal expenditure was Human Resources Development, in-charge of Sarva Siksha Abhiyan and Midday meal scheme, two flagship programmes of the UPA government. Enrolment in schools till primary level is already over 97 %.

With the economy doing well, there is a view in the plan panel that the UPA government should announce partial withdrawal of the Rs 20,000 crore stimulus package given in 2009. The package included tax cuts and incentives for exports, housing, textile and infrastructure to stimulate economy.

“Recent data has shown that the economy is out of recession,” said a senior economist in the panel, who was not willing to be quoted, as officials are not allowed to speak on budget issues. Finance minister Pranab Mukerjee will take the final decision.