At a time when the 12th plan (2012-17) document talks about 120 per cent increase in the Gross Budgetary Support for planned expenditure, the second year of the plan (2013-14) period may see only five per cent increase in the GBS, as the finance ministry is learnt to have suggested ministries to plan their budget accordingly.
The conservative outlook of the finance ministry on the increase in GBS is apparently stemmed out of its concern to ensure fiscal prudence.
“The ministries and departments have been asked to frame their budget proposals for programmes and schemes under their administrative control in tune with the broad guidelines mentioned in the 12th five-year plan document and also ensure that their proposals do not exceed more than five percent of the last year’s allocations,” said a senior government official.
In the current financial year (2012-13), the total budgetary support to the ministries was given to the tune of `5,21,000 crore.
Now if all the ministries and departments of the Union government stick to the finance ministry’s suggestion, the GBS for the year 2013-14 will increase only by about `26,000 crore.
As the exercise of budget making has begun in the government, after receiving all the proposals, the planning commission will as usual firm up the plan outlay for the year (2013-14), which also known as GBS.
Plan expenditure is the sum the government spends on social sector schemes such as Bharat Nirman, the Mahatma Gandhi National Rural Employment Guarantee Scheme and the National Rural Health Mission.
It also includes the Centre’s assistence to the plans of various states and Union territories.
Finance minister P. Chidambram has already promised to rein in this year’s fiscal deficit at 5.3 per cent of GDP and bring it down to three per cent next three years.
Officials, who have been part of the pre-budget meetings, have conceded that controlling expenditure would be the overarching theme of this year’s budget.
And the current suggestion of the finance ministry to limit increase in plan expenditure is also seen in this context.