A battery of social welfare programmes the UPA government is set to announce on October 2 with an eye on elections is likely to be an expensive proposition.
The government will roll out for the common man schemes like the Aam Aadmi Bima Yojana and extension of the National Rural Employment Guarantee Scheme (NREGS) to all districts on the day the nation celebrates the Gandhi Jayanti.
Also on the anvil is a National Farmers? Policy.Most of the programmes were announced in the Budget, and the biggest challenge to government finances will come from the 6th Pay Commission.
Back-of-the-envelope calculations show that if the government goes overboard with its largesse to garner votes, the budgeted schemes will cost it over Rs 97,000 crore in the six months that are left of the fiscal. This excludes the Pay Commission award which will certainly add about Rs 20,000 crore to the bill. Expanding the scope of NREGS to all 604 districts of the country?a proposal passed by the Centre on Friday?would most likely cost the government another Rs 25,000 crore.
Until the end of August, Plan expenditure stood at Rs 72,325 crore or 35.3% of Budget estimate. This was lower at 31.2% in the same period of last year. Between July and August, the Plan expenditure has risen sharply by Rs 12,506 crore.
The rise in just one month is, therefore, over 6% of the Budget estimate.
Non-Plan expenditure, too, has increased to Rs 1,99,042 crore or 41.9% of the Budget estimate. It amounted to 37.4% of the estimate until August 2006, having risen by Rs 30,798 crore, or 6% plus, between July and August.
DK Srivastava,director, Madras School of Economics, points out, GDP growth and the buoyant tax revenue may bail out the government to a certain extent, but the recent slowdown in industrial production and the hardening of the rupee will eventually take their toll on government finances.