National
Sinha, Pant agree on allocation of Plan funds
By Our Special Correspondent
NEW DELHI, JAN. 22. Unlike last year when Prime Ministerial intervention was required, the Union Finance Minister, Yashwant Sinha, and the Deputy Chairman of the Planning Commission, K.C. Pant, have reportedly reached a consensus on the provisions of Plan funds for 2002-03 after a two-hour meeting today.
The figure for gross budgetary support (GBS), which determines the Plan allocation of various Ministries and States, would be finally announced by Mr. Sinha in his budget speech in February. But official sources indicated that the actual figure might be decided within the next few days, possibly after one more meeting between Mr. Sinha and Mr. Pant.
Against the Rs. 98,600 crores GBS provided in the 2001-02 fiscal year, the Planning Commission has sought an allocation of Rs. 1,30,000 crores for the coming fiscal. This is an enhanced figure from the commission's earlier estimate of Rs. 1,13,000 crores since it has now been worked out that the fresh schemes announced made by the Government during the course of the current year would cost an additional Rs. 29,000 crores.
Keeping in view the magnitude of the fund requirement, it was reportedly decided at the meeting that sectors such as power, urban development, agriculture and the public distribution system would be provided the necessary funding, but on benchmark basis, that is, on the basis of progress achieved instead of providing the entire allocation all at once.
Secondly, it was felt that the performing States had to be given some additional incentives, though the view in the commission was that the gap between the developed States and the poorer States was widening which could lead to social tensions.
The meeting also confronted a peculiar situation when it was found that all the Central Ministries combined had sought a total budgetary allocation of Rs. 1,44,000 crores for the coming fiscal year. The demand is against the actual allocation of Rs. 54,400 crores for 2001-02. Hence, the decision that gainful users of public money would not be starved of funds while those Ministries which have a poor track record of fund use would not have their demands met.
For kick-starting the economy in the coming fiscal, the meeting felt that the Government would have to play a major role in terms of investment but it was also decided that a watch would have to be kept on the growing fiscal deficit which results in lowering of the country's international credibility. This, in turn, adversely affected foreign investment.
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