The Planning Commission has written to the finance ministry, saying that the fund requirement for programmes related to the national common minimum programme was so large that it should be allowed to use part of the foreign exchange reserves for Plan spending in the next fiscal.
The gross budgetary support for the annual Plan for 2005-06, on the basis of revised Tenth Plan requirements, is around Rs 170,000 crore (Rs 1700 billion). However, this does not take into account the additional requirements placed on the Plan funds on account of the national common minimum programme schemes.
"The communication has been sent to the finance ministry," said an official.
With Budget preparations under way, the Planning Commission, which allots Plan funds to the states and central ministries, has made its position clear on the use of forex reserves.
The finance ministry and Reserve Bank of India have so far not favoured the idea of using foreign exchange reserves for funding infrastructure. A final decision has, however, been left to the prime minister.
At last count, ministries had asked for an additional Rs 52,000 crore (Rs 520 billion) for implementing the national common minimum programme schemes in the next fiscal.
Among the new and revamped programmes under the national common minimum programme are the mid-day meal scheme, employment guarantee programme, Backward States Grand Fund, a rural health programme and irrigation-related schemes.
The gross budgetary support for the current fiscal, at Rs 145,600 crore (Rs 1456 billion), was almost 20 per cent higher than the allocation of Rs 121,500 crore (Rs 1215 billion) in 2003-04.
As per the Tenth Plan estimates, a gross budgetary support of Rs 191,000 crore (Rs 19190 billion) was required for 2005-06. But that figure was based on a higher growth path. Accounting for the lower growth path that the economy is on, the demand should be revised downwards to Rs 170,000 crore, said officials.
