As the Eleventh Five-Year Plan period (2007-12) reaches halfway stage, the government is likely to face substantial financial shortfalls in the next two years, resulting in a marginal decline in the originally envisaged cumulative gross budgetary support (GBS) of Rs 1.6 lakh crore.
Planning Commission estimates show that there might be a decline of 17.58 per cent in the estimated GBS for 2010-11 and an estimated decline of 37.8 per cent for the last plan year (2011-12).
According to officials, the global economic slowdown is a major reason for the expenditure plan going awry. The Planning Commission had expected a much less expenditure during the first three years of the Eleventh Plan. However, due to the necessity of increased spending in certain sectors to stimulate the economy, it has led to a larger-than-expected expenditure. This, in turn, will result in substantial shortfalls in the next two years.
“We had expected at the beginning of the Plan that our fiscal deficit situation will be good by the mid of the Plan period, which will facilitate more spending during the last two years. However, the slowdown led to increased spending in sectors like infrastructure and rural development. Therefore, we might end up spending less in some other sectors,” said Planning Commission member Abhijit Sen.
In the wake of the slowdown , GBS for the years 2008-09 and 2009-10 has exceeded the estimates by 19.74 per cent and 8.85 per cent, respectively, to Rs 2,12,099 crore and Rs 2,55,353 crore.
As some sectors have received increased support, sectors like health, education and agriculture will suffer in relative terms from less spending. Interestingly, when the Eleventh Plan was conceptualised, these were stated to be the focus areas.
