Crisis-hit sectors should get more funds: plan panel

The Planning Commission is in favour of increasing the government’s planned expenditure to support sectors that have been adversely affected by the current economic slowdown.

Replying to a question related to the possibility of additional fiscal stimulus measures in the forthcoming Budget, Planning CommissionDeputy Chairman Montek Singh Ahluwalia said: “We have started some discussion with the finance ministry. This is related to what should be an appropriate size for planned expenditure for 2009-10.”

In the interim Budget announced in February this year, the planned expenditure for 2009-10 was budgeted at Rs 2,85,149 crore, which is 4.73 per cent of India’s projected output for the fiscal.

Planned expenditure budgeted for 2009-10 in the interim Budget remained almost flat, if compared to the revised estimates of the previous year. But it was an increase of 17.15 per cent, compared with Budget estimates of 2008-09. This was because of increase in planned expenditure on account of the three stimulus packages announced between December 2008 and February 2009.

“We are looking at the expenditure absorption capacity of different sectors and then making some recommendations,” Ahluwalia said in his first interaction with the media, after being re-appointed as the head of the apex plan panel.

Supporting the cause of infrastructure funding, the plan panel chief called for review of the cut-off date for refinancing infrastructure projects through the Rs 10,000 crore tax-free bonds raised by Indian Infrastructure Finance Company Ltd (IIFCL).

The government had allowed IIFCL to raise the tax-free bonds in December 2008. But the condition was that the funds could be used to refinance infrastructure projects, which have gone for bid after January 31, 2009.

“The issue came up in a meeting with the Road Transport and Highways Minister Kamal Nath, to which I was invited. Some people felt that the present restriction needs to be reviewed. They are looking at the issue. They will come back to us and the finance ministry. I personally have no objections at looking at a proposal which says that the date can be shifted some days back,” he added.

Ahluwalia also added that the plan panel will look at possibilities of merging social sector projects for better management. “In the previous commission, we had looked at that and made suggestions. This is something that we would do again,” he said.

On the issue of the mid-term review of the 11th Plan period (2007-12), Ahluwalia said that the plan panel will take in to account the global factors while reviewing the five-year plan. “Our objectives do not change. But clearly as part of mid-term appraisal, we will look at whether the external environment which we now face is a temporary event. Or if it implies a significantly different external environment for the rest of the plan period. And if so, what modifications are needed in the plan.”