New Delhi: The Budget that finance minister P. Chidambaram presents on 29 February may be a populist one that announces significant spends on farm loan waivers and skills development as previously reported by Mint, but it will likely see only a modest rise in allocations for various social sector programmes.
The Planning Commission, India’s apex planning body which regulates budgetary spending by various ministries and states, has itself asked for only a small increase in such allocations. Government officials close to the budget-making process say Chidambaram has told Planning Commission deputy chairman Montek Singh Ahluwalia, that ministries should not announce any new schemes in the coming year.
“The finance minister has said any ministry wanting to bring out a new scheme shall get a clearance from the prime minister, Manmohan Singh,” said a senior government official who did not wish to be identified.
Ministries associated with flagship social programmes of the government are hoping that more money will be allocated to them in supplementary budgets. Currently, the proposed increase in gross budgetary support (GBS) for Mid-Day Meals, a nutrition programme for school-going children is 9%; that of Sarva Shiksha Abhiyan, a universal primary education programme is 12%; and the National Rural Health Mission, which envisages the provision of basic health facilities in rural areas, gets a hike of 9% over 2007-08.
The total GBS is pegged at Rs2.4 trillion, a 17% rise over last year.
However, the proposed increase for the National Rural Employment Guarantee Scheme (NREGS) is 33%. That is because the programme has to cover all districts in the coming year. It covered 330 districts in 2007-08 but will have to widen to 266 more in 2008-09. The programme seeks to provide 100 days of employment, at minimum wages, to at least one member of poor families in rural areas.
While individual ministries have been asking for more money under various flagship programmes, the current year’s data shows that most are not being executed well and the participation of states has been below expectations.
For instance, under NREGS only 35% of Rs12,000 earmarked for 2007-08 had been allocated till 24 January. Again, under the Indira Awas Yojana and Pradhan Mantri Gram Sadak Yojana (PMGSY), only 23% and 50% of respective allocations had been made till that date.
Money for these programmes is released on the basis of their performance and execution.
GVL Narasimha Rao, political analyst and managing director of Development and Research Services, a research consulting firm, and a Mint columnist, said that the “government may feel that a modest hike in allocation will be enough this year because the utilization of monies has not been good by states.” Rao added that this is apparent in schemes such as NREGS: “Challenges in NREGS were known from the start, but the government somehow thought they would be sorted out.”
Some of these issues were recently highlighted in a report by the comptroller and auditor general, a government body that that audits the spending of government departments and ministries.
Planning Commission officials agree with Rao. “Under PMGSY the state governments have not yet submitted the detailed project reports to the ministry of rural development in almost half the projects. In such cases higher allocations are not justified,” said a senior Planning Commission official who did not wish to be identified.
Pragya Singh contributed to the story.