Economic slowdown to impact budget 2012

The Planning Commission, which allocates development funds for different ministries, has proposed three scenarios: hiking allocation by 5%, 10% and 15% to the finance ministry. Chetan Chauhan reports.

Updated on: Jan 4, 2012, 20:46:17 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The global economic slowdown would show its impact on the Union budget 2012 with the increase in funds for development projects not expected to be more than 10%, less than the average inflation in the last one year.

To salvage the situation, the government may announce a slew of new schemes to be launched in the 12th five year plan including Rashtriya Uach Siksha Abhiyan, a Rs 5,000 crore scheme to support entrepreneurs in the telecom sector and money for implementing the National Food Security law.

The Planning Commission, which allocates development funds for different ministries, has proposed three scenarios: hiking allocation by 5%, 10% and 15% to the finance ministry.

The panel officials, however, expect the finance ministry to give approval for hike of 10 % which would be lowest increase in plan funds in the last four years. The normal increase during recent years had ranged from 12-15%. In budget 2011-12, the plan allocation was Rs 4,41,546 crore, an increase of about 15% from previous year.

Not much increase in plan funds also falls in line with the call of Prime Minister Manmohan Singh on new year's eve for fiscal consolidation.

"I am concerned about fiscal stability in future because our fiscal deficit has worsened in the past three years," the PM had said and added that India once again should being the process of fiscal consolidation.

The government is unlikely to substantially increase funding for existing schemes except in case of health and education. Some of the existing schemes, which have outlived their life, may be scrapped.

The next budget is expected to create some brouhaha for the government as it would launch the 12th five year plan. Finance minister Pranab Mukherjee is expected to a slew of new schemes that would be made operational during the plan period.

As the PM wants more impetus for the agriculture sector, the budget could see a new loan scheme for landless farmers in rural India, which are about 10% of the total rural population, to purchase land. There would be additional funds for increasing agriculture output in eastern India.

The officials say the budget would witness new initiatives in the health sector including making cheaper medicines available through Public Health Facilities and increasing the ambit of the existing insurance schemes.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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