Budget support for Plan

Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia today held preliminary discussions on the Gross Budgetary Support (GBS) for the next fiscal year.

"It was a good meeting. There is a greater meeting of the minds but we will have to have more discussions before we finalise the figure," Ahluwalia told Business Standard after the meeting.

Officials said the 12th Finance Commission's recommendation to hike the level of grants to states would have to be factored in, before the GBS was finalised.

The meeting was attended by Planning Commission Secretary Rajiv Ratna Shah, Economic Affairs Secretary Rakesh Mohan and Expenditure Secretary D Swarup.

The Planning Commission has estimated a total requirement of Rs 1,95,600 crore for the next fiscal year.

This is based on the requirement of Rs 1,70,000 crore for the usual Plan-related spending and an additional amount for the National Common Minimum Programme-related initiatives like the Employment Guarantee Programme, Sarva Shiksha Abhiyan, the mid-day meal scheme, rural health programme, irrigation-related schemes and the backward states grant fund.

The finalisation of the GBS has been delayed this year and the Plan body had written to the Finance Ministry on the issue last week. The GBS is usually finalised by December. The absence of any decision on the issue had held up a number of decisions, said officials in the Planning Commission.

They added that even the mid-term appraisal, which was close to finalisation, required some estimate of what the government was willing to put into programmes and schemes.

The GBS for the current fiscal year, at Rs 1,45,600 crore, was almost 20 per cent higher than the allocation of Rs 1,21,500 crore in 2003-04.