The ministry of finance has assured the Planning Commission of at least 15 percent increase in gross budgetary support for 2010-11, over the 2009-10 budget estimates.
Compared to the current year, this increase is lower. But it is almost certain to go up once a final decision is taken, like every year, following a meeting between the finance minister, the deputy chairman of the Planning Commission and the prime minister.
For 2009-10, the increase in GBS at Rs 2.39 lakh crore was 17 percent over the revised estimates for 2008-09. If compared to the original support estimated at the beginning of 2008-09, the increase was a massive 33 percent. The difference was on account of the extra spending by the government to stimulate the economy.
Officials say the finance ministry's current assurance comes after taking into account the rapid rise in inflation and the need for more expenditure in certain sectors like education, agriculture and rural development. An official requesting anonymity said the finance ministry had also taken into consideration new schemes, which were yet to be implemented, like the Right to Education. It was cleared in 2009.
A 15 per cent increase in GBS for the central plan outlay for 2010-11 will result in Rs 2.76 lakh crore in 2010-11, as against Rs 2.4 lakh crore in 2009-10. The demand from various ministries is much more, at Rs 4.09 lakh crore. Such a raise is almost double the average rate of inflation of 7 percent, which indicates an actual increase in government expenditure.
With 15 percent increase in allocation for the central plan, the last financial year of the Plan (2011-12) period is likely to be left with Rs 2.78 lakh crore, if there are no revisions in initial allocations for the previous year. Officials say that with revisions in the budget estimates for 2009-10 and 2010-11, the Plan outlay for the entire 11th Plan period might have to be revised upwards.
Among the demands from the ministries, the department of higher education has sought 118 percent increase in budgetary support, while the school education department is looking for an increase of 110 percent. Other ministries, like civil aviation, housing and urban development have asked for significant increases in their allocations.
Planning Commission Deputy Chairman Montek Singh Ahluwalia had earlier said that departments asking for increased allocations were a normal process and the allocations would be made after discussions with ministries taking into consideration the resources available for assistance.
The Planning Commission is likely to hold discussions with the finance ministry soon to deliberate and confirm issues related to budgetary resources. Currently the commission is in the process of discussing with various ministries and prioritising sectors for increased allocations in the upcoming Budget.
