India’s plan allocation will see an overall increase of 18 % in the 2011-12 Budget, the UPA-II government has decided. It would mean the Planning Commission will have Rs 4,41,000 crore at its disposal as compared to Rs 3,73,000 crore in the current financial year.
Prime Minister Manmohan Singh took the decision this week after the finance ministry showed its unwillingness for more than 13% increase in the gross budgetary support (GBS), as plan budget is called in official jargon.
The Planning Commission had asked for 20% increase in allocation considering that in the 2010-11 Budget, the increase in GBS was 18%. The finance ministry had cited financial constraints in meeting the demand as it had already allocated R30,000 crore to the states to manage their fiscal position.
According to plan panel sources, the PM was of the view that if the hike in GBS was not comparable with the current financial year, it will send a wrong message to people. “High economic growth should result in more spending on social sector schemes,” an official, not willing to be quoted, said.
A shortfall of 42% to meet 11th Plan target also weighted in favour of the idea. Although the Centre could not have provided such an increase in the last financial year of the plan, the PM was reportedly of the view that more money should be provided for social sector schemes in the budget.
While any new schemes are unlikely to be announced, the panel is expected to hike allocation for health, education and women and child development by over 25 %. The rural development, excluding National Rural Employment Guarantee Scheme, can get increase in allocation of up to 20 %. Although the sector wise allocations are yet to be finalized, the plan panel officials said the focus would continue to be on social sector and skill development. “Giving more than 10 % increase to railways will not be possible,” an official said.
But railways, which is hit by financial constraints, might get substantial increase if the ministry agrees to revise