While the finance ministry is willing to peg GBS at Rs 1,00,000 crore, the Planning Commission is of the view that Rs 1,34,000 crore will be needed in the next fiscal to push Gross Domestic Product (GDP) growth rate to 8 per cent during the Tenth Plan.
The issue came up for discussion at a meeting between finance secretary S Narayan and Planning Commission secretary N K Sinha about a fortnight ago.
During the meeting, representatives of finance ministry and Planning Commission stated the official position. However, in the absence of any follow up meeting either between the officials or finance minister Jaswant Singh and Planning Commission deputy chairman K C Pant, work could not start on expenditure budget.
The GBS for 2002-03 was pegged at Rs 1,13,000 crore. According to a Planning Commission official although one can appreciate fiscal problems, a lower GBS was not acceptable in view of the ambitious Plan drawn at the behest of Prime Minister Atal Bihari Vajpayee. It was at the insistence of Mr Vajpayee that the Commission opted for a 8 per cent growth rate in the Tenth Plan. Fiscal 2003-04 will be the second year of the Tenth Plan and larger investment will be needed to provide momentum to growth. Secondly, he added, the finance ministry should also take into account the poor performance of agriculture on account of drought which has pulled down growth.
Usually, sources said, the GBS size is mutually fixed around the first week of January after discussions between the finance minister and deputy chairman of Planning Commission. In case of any dispute over the GBS size, the issue is resolved by Prime Minister. Thereafter, Planning Commission officials hold consultation with central government ministries to fix the annual plan for the fiscal. The expenditure budget goes for printing around February 12.