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No major rejig in funds allocation

BS Economy Bureau in New Delhi | June 24, 2004 11:22 IST

The finance ministry has shut the door on any substantial rise in expenditure in most sectors in the current fiscal, except for education and health.

Top officials of the ministry said the central ministries have already submitted their expenditure plans for the Interim Budget for 2004-05 and it was difficult to change those plans at this stage.

"A full quarter of the year has passed and the system is not geared to respond to changes so promptly," said the officials.

While a hike in outlay for health and the education sectors have been agreed upon, there may be weeding out of some minor programmes to make the delivery system more efficient.

The government is hopeful that this additional expenditure would be made good by the cess to be levied on some revenue items in the Budget. They also said the government would achieve some expenditure compression in the overall Budget package.

In this scenario, the finance ministry is having to take a close look at which schemes should be given the green signal in the maiden Budget of the new government.

The ministry is hopeful that the subsidy bill for the Centre will not rise. The tab for the subsidy on the petroleum sector is being worked out, they said. But while the phase-out may take longer than 2005-06, the annual burden on the Centre is not expected to cross the Budget estimate of Rs 3,560 crore.

They also said the other major component of expenditure, gross budgetary support (GBS) for plan expenditure by the central ministries and for the state government annual plans, is also unlikely to change substantially.

The GBS has been finalised at Rs 1,35,071 crore in the Interim Budget. It is Rs 13,564 crore more than the GBS for 2003-04, which was Rs 1,21,507 crore.

The officials said there could now only be minor variations to this sum.

Explaining the rigidities of the system, they said the Budget would be approved by Parliament only by September. Ministries would then place their demands for the fresh schemes with the Planning Commission and the finance ministry. By the time the funds reached the development blocks, most of the year would have passed.

They said a large-scale review of the plans would therefore be possible only in the next Budget exercise, due to be presented in another eight months.


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