To avoid protracted negotiations between the finance ministry and the Planning Commission in the face of a possible mid-term election, Prime Minister Manmohan Singh has advised both that the GBS be set in step with the estimates of the final report of an experts group constituted for the purpose. The implication is, despite a record 115% rise in allocation for the Eleventh Plan, the finance ministry will have little elbow room to work out a cut.
A note sent by the Prime Ministers Office says the GBS for has been set at a whopping Rs 14,21,711 crore, about 115% more than that of the allocation in the 10th Plan. The Plan budget for 2008-09 would have to be raised considerably from Rs 2,05,099 crore in 2007-08.
Making obvious that the ruling UPA wants to reach out to the people, using the promises made in the Plan document, allocations for education (19.36%), rural development (13.39%), agriculture (9.75%) and social justice & minorities (6.32%) top the list. To accommodate these spends, the allocation for physical infrastructure, including energy and scientific departments, could see an overall reduction of about 3%.
Realising the strategic importance of the governments National Common Minimum Programme targets, the group has argued that a reduction in GBS for infrastructure and other related areas is inevitable to meet the requirements of public expenditure in the social sector.
The spending pattern will be approved at the National Development Councils (NDC) meeting. A conclave of chief ministers and the Cabinet is slated for November 9, a day after the meeting of the full Planning Commission.