Downturn tugs at the govt treasury

The Planning Commission may have to downsize even the flagship social security schemes after the elections. The reason: a drastic fall in the government’s revenues due to the economic slowdown, reports Chetan Chauhan.

Updated on: Mar 26, 2009, 23:45:00 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The Planning Commission may have to downsize even the flagship social security schemes after the elections. The reason: a drastic fall in the government’s revenues due to the economic slowdown.

“We are thinking of a cut during the 11th Plan period,” confirmed commission member Abhijit Sen.

He said the plan projections had focused on education, health, poverty alleviation and social security on the basis of a growth assumption of 8.5 to 9 per cent.

But since the government’s revenue receipts are steadily falling behind targets, the revised tax collection estimate for 2008-09 was scaled down in December 2008 by Rs 60,766 crore from the budget estimate of Rs 6,87,715 crore to Rs 6,27,949 crore.

On the other hand, the Reserve Bank of India (RBI) estimated in March that the states’ non-development expenditure would go up by Rs 34,590 crore (14.4 per cent) from Rs 2,41,019 crore in 2007-08 to Rs 2,75,609 crore this fiscal because of higher salaries, infrastructure maintenance and loan repayments.

What’s more, Sen said job losses, especially in the unorganised sector, would jack up the expenditure on the National Rural Employment Guarantee Scheme (NREGS), one of the biggest showpieces of the United Progressive Alliance government.

A Rural Development Ministry report said enrolment under the NREGA had already gone up. "People losing jobs in sectors like textiles and diamond-cutting are going back to their villages and getting enrolled under the NREGA," Sen said.

He said the economy could not absorb the 20 million people that enter the job market every year. A senior Planning Commission advisor said, “Even when the economy was booming, only 60 to 70 per cent of the new entrants were getting jobs.”

However, the Finance Ministry will take a final call on the expenditure on the basis of the size of the fiscal deficit it will decide to project in the Budget to be placed after the elections.

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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