Plans B and C to fund spending programmes

BUDGET & GOVERNMENT

Is expected to rise 17 per cent

The Central government will spend Rs 17,646 crore more than budgeted this year. At Rs 5,63,991 crore, as per the revised estimates for 2006-07, this translates into a 3 per cent increase in non-Plan expenditure on account of higher outgo on interest payments, lower than anticipated receipts from accrued interest on re-issue of securities, and increase in input costs and cost of imported fertilisers.

Based on this, Finance Minister P Chidambaram has projected increased expenditure of Rs 98,884 crore, a 17 per cent increase over the current year, in 2007-08. Of this, Plan expenditure is projected to grow by 18.7 per cent to Rs 2,05,100 crore, while non-Plan expenditure is estimated to increase by 16.26 per cent to Rs 4,75,421 crore. Accordingly, the gross budgetary support for 2007-08 has been set at Rs 2,05,100 crore.

The whopping Rs 66,514 crore projected increase in non-Plan expenditure is mainly on account of the Rs 40,000 crore allocation to acquire RBI's equity holding in State Bank of India.

The finance minister has also drawn up alternative plans for meeting additional expenditure. In view of the Eleventh Plan starting from April 1, 2007, Chidambaram targets to find additional resources to the tune of Rs 7,000 crore during the course of the next fiscal as per a 'Plan B'.

As per a 'Plan C', Chidambaram has proposed to tap into resources available outside the Budget and leverage them for the purpose of investment, especially in the infrastructure sector.

For Bharat Nirman, Chidambaram has increased the allocation by 31.6 per cent to Rs 18,696 crore as against Rs 24,603 crore in 2006-07.

In 2006-07, the Centre will give Rs1,20,377 crore to states as their share of taxes and duties. For 2007-08, this amount is projected to increase by 18.3 per cent to Rs 1,42,450 crore.

Total grants and loans to states and union territories are projected to increase by 18 per cent to Rs 1,06,987 crore in 2007-08, from Rs 90,521 crore in 2006-07.

Allocation for agriculture and allied service has been raised by 15.7 per cent to Rs 8,558 crore from Rs 7,391 crore.