Date:17/01/2005 URL: http://www.thehindubusinessline.com/2005/01/17/stories/2005011701560500.htm

Back Montek meets Chidambaram on Plan-related Budget issues

Our Bureau

New Delhi , Jan. 16

IN the run-up to the 2005-06 Union Budget, the Deputy Chairman of the Planning Commission, Dr Montek Singh Ahluwalia, on Saturday met the Union Finance Minister, Mr P. Chidambaram, and held discussions on "Plan-related Budget issues."

Speaking to Business Line here soon after the nearly two-hour-long meeting at North Block, Dr Ahluwalia said that the Plan-related Budget issues include gross budgetary support (GBS) to the Central Plan assistance as also infrastructure-funding, both physical and social. He, however, refused to be drawn on to the specifics.

Indications are that the Union Budget for 2005-06 may come up with a roadmap for using the burgeoning forex reserves for infrastructure development. Dr Ahluwalia had earlier mooted the idea of utilising about $5 billion of the forex reserves annually for the next three years to "fill the critical gaps in infrastructure."

But sceptics have been arguing that using forex for building infrastructure would affect inflation, apart from widening fiscal deficit. As regards GBS, The Planning Commission has been making a case for stepping up GBS to Rs 1,95,000 crore. In the Union Budget 2004-05, GBS allocation was Rs 1,45,000 crore.