The Planning Commission and the finance ministry have discordant views on the size of the 2007-08 Plan.

The ministry has indicated a 2 per cent increase in the size of the annual plan for 2007-08, taking it to Rs 200,000 crore (Rs 2,000 billion) from Rs 196,000 crore (Rs 1,960 billion) in the current fiscal.

However, Planning Commission Deputy Chairman Montek Singh Ahluwalia said he had impressed upon the finance minister the need for an increase of Rs 15,000 crore (Rs 150 billion) in the plan size (7.5 per cent over the current year) to fund the requirements of priority sectors and the increased demand from flagship programmes.

"It was made clear by Ahluwalia that the indicated amount (of Rs 4,000 crore -- Rs 40 billion) was not sufficient. The commission is in the process of submitting its figures to the finance minister in a day or two," sources told Business Standard.

Earlier, an expert group set up by the Planning Commission had proposed restructuring of centrally sponsored schemes. It had recommended that only 25 schemes with an outlay of Rs 300 crore (Rs 3 billion) and above during 2006-07 be continued during the 11th Five Year Plan and the remaining 130 schemes (with an outlay below Rs 300 crore -- Rs 3 billion -- per annum) be wound up.

However, the finance ministry has decided to retain another set of 27 schemes pertaining to the North-East, scheduled castes, scheduled tribes, minorities, and community development, among other things. These schemes constitute nearly 90 per cent of the outlay for central schemes. The remaining 103 schemes will be wound up.

The finance minister is expected to announce the reduction in Union Budget 2007-08. The commission has suggested that 114 schemes be treated as non-plan schemes during the next Plan and 120 schemes be terminated at the end of the 10th Plan.

"The decision has been taken on the basis of zero based budgeting," sources said. Savings arising out of this exercise would be utilised elsewhere in the plan proposals and would form the core component of the Annual Plan 2007-08.