Montek promises 'major rejig' in 11th Plan

Social sectors like health and education will get a leg up in the Eleventh Plan (2007-12), even as some other sectors may see a reduction in fund allocation.

Promising a "major reorientation" of Plan allocations, Planning Commission Deputy Chairman Montek Singh Ahluwalia told Business Standard that the focus would be on inclusive growth.

"When the Plan comes out, one thing that you will find is that there is a major reorientation that has taken place. I am afraid that many people will say their share has gone down. But, you cannot have a share going up, without a share going down," said Ahluwalia.

Explaining the general trend towards fund allocation, Ahluwalia said allocation for agriculture and irrigation would go up during the Plan period. "Rural development will also see an increase in fund allocation, while education allocation will go up hugely," he said. 
 

BUDGETARY SUPPORT DURING TENTH PLAN                                                                 (in Rs cr at 2001-02 prices)
Heads of Development	Budget Support		%  increase
	Ninth Plan (1997-2002)	Tenth Plan  (2002-2007)
Agriculture & Allied Activities	12,008	21,068	75.4
Rural Development	56,404	79,724	41.3
Special Area Programmes:
Irrigation & Flood Control	1,955	3,600	84.1
Energy	25,632	51,600	101.3
Industry & Minerals	7,362	11,786	60.1
Transport	36,784	65,350	77.7
Communications	3,559	7,944	123.2
Science, Tech & Env	14,563	27,570	89.3
General Economic Services	4,091	10,587	158.8
Social Services	64,927	120,333	85.3
General Services	5,987	6,173	3.1
TOTAL	233,272	405,735	73.9

On the infrastructure front, the Planning Commission deputy chairman added, "Our whole strategy for infrastructure is to bring in more public-private partnership. So, I hope there will be a huge increase in investment in infrastructure, but not necessarily an increase in public share, though investment in irrigation and rural roads will go up."

When asked which sectors would see a decrease in Plan allocations, Ahluwalia said, "For that you have to wait for the Plan to be finalised".

However, experts feel that it would be a "zero-sum game" for the government to reduce expenditure in some sectors for the sake of the social sector.

"A major part of social sector spending in India comes from the state governments. Social sector involvement of the central government is not very large at present. In such a scenario, compressing some sectors to fund social sectors will be a zero-sum game," said M Govinda Rao, director, National Institute of Public Finance and Policy.

Rao added, "The government can reduce its fund allocation to sectors where private parties can play a significant role, but that can only happen in the longer run".