The size of the Orissa’s annual plan outlay is likely to be increased marginally from Rs7500 crore in 2008-09 to Rs 8100 crore in 2009-10.
This has been done keeping in view the economic slowdown, limitation of the Fiscal responsibility and Budget Management (FRBM) Act and adherence to the fiscal discipline, among others. According to sources, the state finance department has given an indicative outlay of Rs 8100 crore for the state plan 2009-10 to the planning and co-ordination (P&C) department based on the projected available resources, borrowing limit and possible Central assistance.
However, the finalisation of the state plan for the next fiscal will take about one more month. Meanwhile, a team of senior officials of the state government led by the Development Commissioner (DC) T K Misra recently met the officials of the plan panel in New Delhi and held preliminary discussion. With the working group meeting of the Planning Commission scheduled to be held on 22nd and 24th of January, the process has gained momentum, sources said. All the administrative departments have been instructed to send their estimates of the plan outlay for the next fiscal in the current week.
With the major component of the plan outlay being tied to the ongoing schemes, the administrative departments will not have much scope to spend beyond the plan schemes. It may reduce the funds available under the untied scheme substantially.
“Since the tied component in the proposed state plan outlay is more, the non-tied plan outlay for the departments may be reduced by 20 to 25 percent next fiscal”, a senior official of the state P&C department told Business Standard.
However, the projected plan outlay as indicated by the finance department looks conservative as it has factored into the committed expenditure in non-plan account. Similarly, it has to take the 12th Finance Commission’s (TFC) parameters into account. Since the 13th Finance Commission will consider the actuals (A) for 2007-08 with the revised estimates (RE) of 2008-09 and budget estimates (BE) for 2009-10, the estimates of 2009-10 is crucial.
So the finance department is less inclined to do something which will result in loss in the transfer of funds under the 23th Finance Commission dispensation. “With the large pay out in the form of arrear salary slated next fiscal and dent in resources due to impending recession, the state plan outlay for the next fiscal need to be prudent, reasonable and realistic”, a senior official of the state finance department said.
Sources said, the committed expenditure will be higher next fiscal due to Rs 800 crore food subsidy on account of the Rs 2 per kg rice, Rs 96 crore for Madhubabu pension plan, Rs 280 crore towards state share for ICDS, Rs 96 crore for mid-day meal (MDM) programme and Rs 147 crore for the MLA lad among others. Besides, the state government will have to stick to borrowing norms of the TFC which stipulates that the borrowing by the state government will have to be within 3 percent of the Gross State Domestic Product (GSDP).The state plan outlay for the current fiscal has been fixed at Rs 7500 crore.