Core sector gets a push in Outcome Budget

Rs 1,500 crore public-private partnership project likely to be cleared before September.

The government on Thursday presented its first Outcome Budget which set a time-table for implementing key decisions like aircraft acquisition for state-run airlines, public-private partnership for nine infrastructure projects and the highway development programme.

At the same time, the 723-page document tabled in Parliament by Finance Minister P Chidambaram showed that the United Progressive Alliance government's big-ticket social sector schemes could face implementation hurdles ranging from long gestation periods to floods.

In a number of cases, it is the absence of counterpart funding from states which is expected to lead to non-utilisation of central funds. In other cases, a lack of viable proposals or eligible beneficiaries, and operational difficulties, will make implementation of schemes tough.

The tabling of the document is a fulfilment of Chidambaram's promise made in his Budget speech where he assured Parliament that the government would quantify the outcome of its spending.

The important targets listed in the Outcome Budget included the Rs 1,500-crore public-private partnership project to be cleared by the Cabinet before September, and projects likely to be sanctioned before the year ends.

Similarly, the civil aviation ministry hopes to get all required government approvals for acquisition of 50 aircraft for Air India and 43 for Indian Airlines during the current financial year. An outlay of Rs 762 crore has been made for Indian Airlines fleet acquisition plan and another Rs 10 crore has been allocated to Air India.

On the social sector schemes, the Outcome Budget pointed out that the National Rural Health Mission, with an allocation of over Rs 6,600 crore in 2005-06, was not expected to trigger improvements in the health sector this year. "The first year is proposed to be used as a preparatory phase of the mission. Results will be visible from 2006-07," it said.

The requirement of additional funds will also be a constraint and operationalising the mission under the panchayati raj leadership at district levels will not be easy. Capacity-building will take time and convergence among health and family welfare programmes, and among different departments, will be a "challenging task".

Similarly, under the Sarva Shiksha Abhiyan, the Centre has allotted Rs 7,800 crore this fiscal and aims to enroll all the 8.13 million "out-of-school" children in elementary schools. The success hinges on updating village education registers by states, filling up vacant posts of teachers and reducing absenteeism.

In developing school infrastructure -- buildings, drinking water facilities and toilets, and time overruns and states not releasing their share in multiple installments -- are listed as risk factors. In improving the quality of education by supplying books, appointing teachers and providing them on-job training, logistics and court cases might pose problems, the document said.

The Sampoorna Grameen Rozgar Yojana run by the rural development ministry has been allotted Rs 4,000 crore and the National Food for Work Programme has been given Rs 6,000 crore this fiscal.

Both are expected to be merged with the National Rural Employment Guarantee Programme, when it is launched. But floods and natural calamities are expected to upset the Centre's plans as grain supply can be a problem.

The Swarnjayanti Gram Swarozgar Yojana, which has been allocated Rs 960 crore in 2005-06 to provide sustainable self-employment to the rural poor can be hampered by inadequate flow of bank credit.

Implementation of the Integrated Child Development Services, with an allocation of Rs 3,685 crore, can also face roadblocks if the states' share of nutrition cost is not received in time.

The Accelerated Rural Water Supply programme has been given Rs 4,050 crore to provide safe drinking water to rural habitats and schools. The programme's achievement and outcome depend on states providing a matching share of funds. The same is the case for the Rs 700-crore Central Rural Sanitation Programme.

The Rs 5,000-crore Backward States Grant Fund to redress regional imbalances, which was being finalised, could also face problems if states did not chip in, the Outcome Budget said.

The Accelerated Irrigation Benefit Programme, with Rs 4,500 crore, which aims to complete ongoing irrigation projects, will be hampered by the inability of states to raise required market borrowings.

The prognoses are not only for the big ticket programmes targeting humans, for which there are no guarantees. The success of Project Tiger, with an allocation of Rs 32 crore, will also depend on timely release of matching grants and release of central assistance by state governments to executing agencies.

A number of schemes, including the Rs 2,800-crore National Urban Renewal Mission, the Rs 1,500-crore scheme for Basic Services for the Urban Poor, the Urban Infrastructure Development Scheme for Small and Medium Towns, and the Integrated Housing and Slum Development Programme are yet to be approved by the Cabinet.

Ministries expect outcomes in the last quarter, but then, they are likely to come up against the 33 per cent expenditure ceiling imposed by the finance ministry to check bunching of payments.

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Targets set

• Rs 762 crore outlay for Indian Airlines' fleet acquisition plan and another Rs 10 crore for Air-India.
• Shipping ministry may issue pre-qualification tenders for dredging work for Sethusamudram project by September.
• NHAI expects to complete 5,846 km of the Golden Quadrilateral by December 2006 and 7,300 km of the North-South and East-West corridors by 2007.
• Aim to add reserve accretion of 49.95 mt of oil equivalent.
• MTNL allocated Rs 100 crore for overseas forays.