Search the Internet          Tips  Sites: Finance, Investment

Plan panel, FinMin may differ over fund allocation

Simmering differences over allocation of Plan funds are likely to surface at the meeting of the full Planning Commission, on Saturday, as the finance ministry is believed to be making a case for reworking the eight per cent growth target in view of the tight financial position.

The Planning Commission will meet in New Delhi under the chairmanship of Prime Minister Atal Bihari Vajpayee to approve the Tenth Plan document before sending it to the National Development Council for approval.

Contentious issues of divestment and foreign direct investment would figure prominently as these could possibly impact the resource flow for the attainment of the annualised eight per cent growth target set for the Plan period, informed sources said.

This coupled with the gaping fiscal deficit, which is likely to overshoot the target of 5.3 per cent set for the current financial year by one percentage point, could constrain finance ministry's ability to guarantee a higher level of budgetary assistance needed for the Plan target.

Fearful of the finance ministry's move, the Planning Commission sources pointed out that any cut in social sector spending or curtailment of growth target could send wrong signals, particularly when the targets were approved by the NDC while clearing the draft approach paper.

ALSO READ:
More Money Headlines