The annual central plan outlay has for the second year in a row seen a shortfall in targeted expenditure.
This is being perceived as the inefficiency of the system to discharge its planned expenditure liabilities and the failure of the government to push ahead with critical infrastructure projects.
The total central plan outlay in the revised estimates is Rs 81,034 crore, against Rs 91,389 crore in the budget estimates, a drop of Rs 10,355 crore or a percentage shortfall of 11.76 per cent.
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However, in the coming year, the total central plan outlay is sought to be increased to Rs 99,288 crore, up Rs 7449 crore from the budget estimate of 1997-98. The outlay is an increase of 22.52 per cent over the actual spending that took place in 1997-98.
The sharpest increases are in energy (a rise of 40 per cent) with the budget estimate for 1998-99 at Rs 29,765 crore, and communications (a rise of 33.5 per cent) with the budget estimate placed at Rs 14,877 crore.
The sharpest fall in the current year has been in the communications sector (16.6 per cent), followed by transport (13.53 per cent) and energy (12.81 per cent). However, shortfalls of over Rs 1,000 crore have also been registered by rural development and social services. While the revised estimate on rural development is Rs 6,949 crore, the budget estimate was Rs 7,691 crore.
Planning Commission officials said this had happened mainly on account of the directive issued in September-October to cut plan expenditure, soon after the ministries had started disbursing funds. Ministries, hence, first covered expenditures on projects undertaken from the previous year and the axe fell on all new projects.
A decision to reverse this economy drive was taken far too late in the year (January 15) and with just 2-3 months left for the ministries to get all the required approvals, expenditure was delayed to the next year. A number of projects, said Commission officials, have suffered as a result. However, reacting to this, finance ministry officials said this was a reflection of the systems failure to absorb.
Commission officials welcomed the larger allocation. They said if disbursed, this would result in increased demand in the system since the multiplier effect would be strong and would in turn boost industrial growth.