The Union Budget on Thursday estimated a Plan expenditure of Rs 5,75,000 crore for 2014-15, which is 20.9 per cent more than the actual estimate of 2013-14, though barely 3.5 per cent more than in the interim Budget presented in February.
Presenting his maiden Budget, Finance Minister Arun Jaitley identified agriculture, capacity creation in health and education, rural roads and national highways infrastructure, railway network expansion, clean-energy initiatives, development of water resources and river conservation plans as the main thrust areas in which the Plan funds will be spent in 2014-15.
Referring to the restructuring of the Centrally Sponsored Schemes (CSS), initiated by the previous United Progressive Alliance (UPA) government and carried forward by the National Democratic Alliance (NDA) regime, Jaitley hoped the convergence of programmes would mean more impact of the money spent. As part of the restructuring, the number of CSS has been reduced to 66 from the earlier 126, by either eliminating or clubbing programmes with similar focus. "While preparing estimates of Plan expenditure, attention was paid to the absorptive capacity of the department and on achieving greater outcome with the same financial outlay," Jaitley said.
He added that in 2013-14, Plan funds of only Rs 4,53,085 crore could be utilised as against a much higher allocation. The Budget numbers show the growth in capital Plan expenditure had been somewhat better than that for revenue expenditure.
The Plan expenditure on capital account is estimated at Rs 11,497 crore, which is around 7.5 per cent more than the interim Budget of 2013-14, while that on revenue account has been pegged at Rs 4,53,503 crore, only 2.6 per cent more than the interim Budget. This also reflects the changed priorities of the NDA government, as capital Plan expenditure is largely used to create durable assets like roads and highways.
Of the total Plan expenditure of Rs 5,75,000 crore in 2014-15, the Gross Budgetary Support (GBS) has been pegged at Rs 2,36,592 crore - much lower than the total central assistance to state and Union Territory Plans, at Rs 3,38,408 crore. The decline in GBS as against the central assistance to state Plans has been mainly due to the restructuring of the CSS and was effected from the interim Budget of 2014-15, presented by former finance minister P Chidambaram.
While the central assistance to state Plans was estimated at Rs 3,38,562 in the interim Budget, it has been scaled down to Rs 3,38,408 in the papers laid on Thursday.
However, the meager allocation to Plan expenditure in the first three years of the 12th Five-Year Plan (2012-13 to 2016-17) leaves a big question mark on ways to achieve the target set at the beginning of the Plan period. This also sets the course for a big correction in Plan targets during the mid-term appraisal that is expected around October-November.
The 12th Five-Year Plan had fixed a target of Rs 35,68,626 crore of Plan expenditure, of which Rs 13,64,157 crore has been allocated in the first three years. This means the NDA government will have to allocate more than Rs 11,00,000 crore in the next two financial years to meet the target, and that appears a tall order.
The Gross Budgetary Support for the 12th Five-Year Plan was targeted at Rs 27,10,840 crore, of which only Rs 8,97,824 crore has been allocated in the first three years of the Plan period.