Drought may eat into 5-10% Plan spending

Drought contingency plan prepared.

The government may be forced to cut Plan spending by 5-10 per cent in the current fiscal to meet contingency expenses in case of a drought.

According to finance ministry officials, while the government hoped it was only a case of delayed monsoon and not drought, a contingency plan was being readied with Cabinet Secretary BK Chaturvedi having already held several rounds of meeting with secretaries in key ministries and departments.

The officials said slashing Plan expenditure by 5 per cent itself would free resources to the tune of Rs 6,500 crore for drought-related expenses. Besides, the present stock of grain "" at 31.64 million tonnes on June 1, 2004 "" in the government's assessment was also comfortable though it was 20.5 per cent lower than in the corresponding period last year. The drought contingency plan will involve shifting funds to drought-mitigating schemes.

"Irrigation and drinking water-related schemes will need to be the focus," an official said, adding, that if the grain stock could be termed comfortable, water was the biggest concern.

Chaturvedi has also held detailed meetings with senior finance ministry and rural development ministry officials to chart out a drought management plan.

The Centre will also dip into the National Calamity Contingent Fund for meeting drought-related expenditure.

The finance ministry has already done elaborate groundwork on the expenses, should a drought hit the country for the second time in three years. Drought-related expenses topped Rs 12,000 crore, the officials said.

In 2002, the government had released 5.7 million tonnes of grain for drought-affected regions. A 1 per cent surcharge on polyester filament yarn, cars, multi-utility vehicles and two-wheelers and a Rs 50 per metric tonne duty on crude oil were levied to raise money for the National Calamity Contingent Duty.

Over half of the country's major 71 reservoirs have less than 30 per cent water storage, which can spell trouble for the canal-irrigation system in rain-deficient areas.

As many as 10 reservoirs are left with no water, as per the latest data available with the Central Water Commission. As far as the power scenario is concerned, hydro-electricity generation has been 2 per cent below target due to inadequate rainfall.

Hydro-electric units account for 14 per cent of the total 586 billion unit power to be generated during the current fiscal. The power ministry, however, does not expect the hydel sector shortfall to exceed 5 per cent, which will translate into an overall shortfall of 0.7 per cent of the total power generation.

Drought: It's official now

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Officially conceding that the agricultural scene in many parts of the country is causing concern due to lack of rains, the Centre has finally advised the states concerned to immediately arrange for the supply of drinking water and fodder in the drought-hit tracts. It has also asked Rajasthan, where substantial area is likely to remain unsown, to prepare for drought-relief employment programmes.