The government has finalised the plan size for the next fiscal at Rs 1,60,000 crore. Of this, Rs 1,13,000 crore will be in the form of gross budgetary support (GBS) and Rs 47,000 crore will be in the form of internal and extra budgetary resources (IEBR).
The GBS figure is much higher than the original figure of Rs 1,05,000 crore which the finance ministry was willing to provide. The ministry had been insisting that it would be willing to provide for a maximum of 10 per cent increase in the size of the GBS each year in line with the growth in revenue. The GBS figure for the previous year was Rs 95,100 crore and an additional Rs 5,000 crore contingent on disinvestment proceeds.
But the IEBR has been reduced drastically since few public sector enterprises have lined up any major investment plans. Compared to the IEBR figure for 2001-02 of Rs 70,000 crore the figure for the next fiscal shows a drop of 33.5 per cent.
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In the year 2001-02, out of 16 companies which had projected a bond or debenture issue totalling Rs 15,357 crore, very few like National Highway Authority of India and others actually tapped the market. The sum of Rs 47,000 crore for 2002-03 is, therefore, largely made up of depreciation reserves and the retained profits of the oil PSUs.
But to compensate the drop in the IEBR the finance ministry has agreed to provide an almost 20 per cent increase in the GBS as compared to last year. The amount is much lower than what the Planning Commission had asked for. The plan body had asked the finance ministry to provide Rs 1,20,000 for the annual plan for 2002-03.
The plan body had argued that with public investment required to pull up the growth rate of the economy, the government should consider front loading expenditure in the Tenth Plan period which seems to have been partially accepted by the North Block.
For the current year, the GBS was fixed at Rs 1,00,100 crore, of which Rs 5,000 crore was contingent on disinvestment proceeds coming in. Since the disinvestment ministry has not managed to garner anywhere near that amount, in effect, the GBS for the current fiscal was Rs 95,100 crore.