Gross budgetary support for core sectors set to fall

The government is likely to cut the gross budgetary support (GBS) for the infrastructure and the energy sectors during the 11th Plan period (2007-12) as it expects increased private participation in these sectors.

The government is expected to cut its share in infrastructure to 8.6% during the 11th Plan from 10.2% during the 10th Plan. In the energy sector, the reduction will be from 5.9% in 10 th Plan to 4.2% in the current Plan period.

However, the government?s priority sectors like education, rural development, agriculture and healthcare are expected to get the bulk of the gross budgetary support during the 11th Plan period. These sectors are estimated to bag 70% of the GBS funds, which are pegged at Rs 15,76,154 crore for the entire Plan period. In the 10th Plan period, these sectors were given about 53% of the GBS, which was finalised at Rs 7,06,000 crore.

However, the GBS for the 11th Plan is 123% more than the GBS in the 10 th Plan. Support for mega social sector programmes like Sarva Siksha Abhiyan, Mid Day Meal, Jawaharlal Nehru National Urban Renewal Mission and Bharat Nirman are expected to be hiked by a whopping 156.25% to Rs 12,00,738 crore in the 11th Plan over Rs 4,68,578 crore allocated in the 10th Plan.

Bulk of the increase in the GBS is being made to ensure easy and appropriate flow of funds for the flagship programmes of the UPA government and core infrastructure sector projects for which about Rs 9,70,973 crore would be allocated. The remaining Rs 2,29,765 would be spent on 50 departments and non-core sector projects.

A final decision on the exact GBS figures for the 11th Plan will be taken at the meeting of the full Planning Commission, to be held soon under the chairmanship of Prime Minister Manmohan Singh.

The GBS for the current fiscal would be Rs 2,05,100 crore. This will grow to Rs 4,97,835 crore in the terminal year of the 11th Plan in which the government hopes to clock GDP growth of 10%. In the last five years, the GBS has grown by over 16% and the trend is likely to continue in the current Plan period as well.

With an eye on the general elections, the GBS for 2008-09, the year of general polls, is expected to be Rs 2,21,772 crore, which would again spiral up to Rs 2,77,565 crore. It will further increase up to Rs 3,73,882 crore and Rs 4,97,835 crore in the final two years of the Plan period.