MP budget: Power, roads to get less

Gender-based budgeting for the first time.

Cash-strapped Madhya Pradesh is likely to curtail allocations to the farm sector, roads and power in its Budget 2007-08, likely to be presented in the assembly on February 26.

Further, the state government will present its first gender-based budget. It is also learnt that the state government may announce an increase in dearness allowance (DA) of its employees in the forthcoming budget.

"This will be in accordance with the promise which the BJP (the ruling party) had made to the electorate, to bring dearness allowance above what the central government pays its employees," a government insider told Business Standard.

Finance Minister Raghavji is likely to bank upon central support for farms, power and roads instead of increasing the outlay from the state's kitty--a balancing act which he is performing during the last three years.

A highly-placed government source told Business Standard that "unlike previous budgets the finance minister will focus on gender-based budgeting and allocating more funds to social infrastructure, thereby earmarking a certain portion to more than a dozen departments that directly deal with women. This will happen for the first time in the state. The state will prefer private partnership to create infrastructure since it (the state) has yet to overcome financial strain."

Plan expenditure estimates, according to the source, are likely to cross Rs 11,000 crore, against Rs 10,397 crore estimated for 2006-07 while non-plan expenditure will touch Rs 23,000 crore against Rs 22,509 crore estimated for 2006-07.

However, the state government may miss the target of reducing the gross fiscal deficit to gross state domestic product (GSDP) ratio to 3 per cent by 2009-10.

The revenue deficit of the state has been widening since 1993; it stood at 0.85 per cent during 1993-94, and 5.78 per cent during 2003-04. Similarly the fiscal deficit in the said period has shown an increasing trend from 1.86 per cent (1993-1994) to 9.43 per cent during 2003-2004.

The state's farm sector was predominant before 1993-1994 followed by the service sector. By 2002-2003 the proportion of the primary sector in the GSDP decreased by 14.96 per cent, while the proportion of the secondary sector increased by 7.39 per cent and that of the service sector by 7.57 per cent.