Alaundry list of populist schemes being proposed by various Central ministries is likely to find tight funding constraints in the Union Budget.
That’s because the finance ministry has pegged the Gross Budgetary Support (GBS) for these and other programmes at Rs200,000 crore, nearly Rs11,000 crore short of what was being sought by the Planning Commission.
“Since the GBS is lower than was being sought by the Planning Commission, the decision is that any new scheme being launched next fiscal, the first year of the 11th Five-Year Plan, will be under-provided for, initially,” said a senior government official, familiar with the Budget exercise. “There will be a review conducted later in the year and additional resources will be allocated to any scheme in which the outlay is found to be insufficient,” said the official who did not want to be identified.
A significant portion of the GBS, some Rs65,000 crore, is likely to be spent on government’s flagship programmes such as the mid-day meal scheme, the Sarva Shiksha Abhiyan, National Rural Health Mission, National Rural Employment Guarantee Programme, Jawaharlal Nehru Urban Renewal Mission and the Northeastern region.
Because these programmes are politically sensitive and no government wants to be seen rolling them back, the GBS gap is primarily going to impact new proposals from various ministries.
For example, officials familiar with the proposals said the government had managed to save a substantial portion of the Rs11,200 crore fund allocated to the National Rural Employment Guarantee Programme (NREGP) in this fiscal. “Since we had a good agricultural year, the outgo in 2006-07 under the NREGP is expected to be Rs7,000 crore against a provision of Rs11,200 crore. Next fiscal, around Rs12,000 crore is expected to be provided for the scheme since its coverage will be extended from 200 backward districts to at least 50 more districts and possibly the special category states,” an official said.
The Planning Commission and the finance ministry have agreed to prune the existing number of centrally-sponsored schemes (CSS) from 155 to around 100. However, with several ministries submitting proposals for new schemes to be launched under the 11th Plan, the total number of CSS could end up being more than 100, the official said.
On the subsidy front, the only concern next fiscal is on account of fertilizers. “Food subsidy is under control since subsidy outgo to programmes like the mid-day meal scheme, Sampoorna Grameen Rozgar Yojana and Integrated Child Development Services is now shown as part of the plan scheme and not food subsidy.”