The Planning Commission today said it would start interacting with Union ministries over the next two-three weeks over their demands for gross budgetary support for 2010-11.
“We are yet to get the actual demands from a handful of ministries. Still, the Planning Commission will discuss with ministries over the next two to three weeks what their demands are, which ones of them are justified and to what extent they can be fitted within the resources available,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said on the sidelines of an event organised by industry body Ficci.
Business Standard had earlier reported that 58 Union ministries and departments had together sought an increase of 82 per cent in gross budgetary support (GBS) for the planned outlay in 2010-11. The proposals amounted to Rs 4.09 lakh crore in 2010-11, against Rs 2.24 lakh crore in 2009-10. This, despite the finance ministry having aimed for a return to path of fiscal prudence.
Ahluwalia said the ministries always ask for what is more than the expected budgetary support. “This is a normal process... I mean the essence of the planning function is that we will be discussing with the finance ministry what is available. But then we will be trying to match the demands to the available resources,” he added.
Industry chambers want continuation of stimulus
As part of the Budget-making process, prominent industry chambers like the Federation of Indian Chambers of Commerce and Industry (Ficci) and the Confederation of Indian Industry (CII) will meet Finance Minister Pranab Mukherjee on Tuesday to give their pre-Budget recommendations.
Industry chambers are set to ask the government to continue with the stimulus measures it had announced to support the flagging economy.
Ficci, in its pre-Budget report, states that GDP, industrial production and core sector performance are encouraging. However, it will take some more time to revert to a high GDP growth trajectory of 9 per cent. It states that even with the “twin troubles” of high fiscal deficit as well as escalating inflation rate, rollback of stimulus measures does not seem to be a suitable solution.
Industry chambers are of the view that it is too early to bring in a restrictive monetary policy and abandon the stimulus measures announced to reactivate growth triggers.
“Our major recommendation for the Budget is that stimulus measures should be continued so that growth can gain momentum. Moreover, we want that implementation of the Goods and Services Tax (GST) should be done within this year and an announcement defining the date and roadmap should be made in the Budget,” Chandrajit Banerjee, director general of CII, told Business Standard.
Implementation of GST is also a major agenda with the industry chambers. The tax regime, supposed to be introduced by April 1, is expected to get delayed due to differences between central and state governments. Industry bodies want that the government should make a clear announcement regarding introduction of GST in the Budget.
Other major recommendations of Ficci include reduction in personal and corporate tax rates, benefits to the housing sector, reintroduction of investment allowance and more incentives for the exporting community.
