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FM under pressure to contain deficit next fiscal

FM under pressure to contain deficit next fiscal
PTI
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First Published: Sun, Jan 17 2010. 11 33 AM IST
Updated: Sun, Jan 17 2010. 11 33 AM IST
New Delhi: The Planning Commission has said that the finance ministry would be under some pressure to cut fiscal deficit during 2010-11 from the projected level of 6.8% of GDP in the current fiscal, as certain departments are asking for substantial increase in their plan outlays.
“The finance minister would be under some pressure to reduce fiscal deficit from projections of 6.8% this fiscal,” Planning Commission member Abhijit Sen said.
He said there are certain departments which have asked for substantial increase in expenditure for schemes like rural employment guarantee during the next fiscal.
Asked about the hike in allocation to the agriculture ministry in view of the rising food prices, Sen said, “I am not looking at an increase. Our view is that there are certain departments which at the end of 2009-10 would be near or exceeding their total 11th Plan (2007-12) expenditure. Thus those departments would have to maintain certain expenditure level.”
Citing examples of such departments, he said with this much of expenditure, rural development, the Railways and urban development ministries could have completed their 11th Plan targets by the middle of 2010-11.
About the finance ministry agreeing to a 15% jump in the gross budgetary support next fiscal, Sen said, “the ministry has indicated that, but 15% hike in the GBS is less than what we have asked.”
The gross budgetary support (GBS) is the amount of assistance provided by the Centre for various Plan schemes of the ministries.
The finance ministry has targeted to bring down fiscal deficit to 5.5% next fiscal from the estimated 6.8% this fiscal.
But with various quarters asking for stimulus to continue, there may be some pressure on the fiscal deficit front. However, the Government will get some respite on this front, as arrears to its employees due to the Sixth Pay Commission report would not be there and it will be making less payment to banks for loan waiver scheme next fiscal than it did this fiscal.
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First Published: Sun, Jan 17 2010. 11 33 AM IST