Govt to raise GBS by 16% to Rs 5.12 lakh cr for FY13

The Finance Ministry is believed to have approved around 16% increase in the plan spend -- Gross Budgetary Support (GBS) -- for the next fiscal on social sector programmes like employment guarantee scheme and Bharat Nirman project.

The plan expenditure for 2012-13 would be around Rs 5.12 lakh crore, up 16% over the Rs 4.41 lakh crore for provided this fiscal, a source privy to the development said.

The Planning Commission had asked for 18% hike in the plan expenditure or GBS to raise the spending to Rs 5.21 lakh crore in 2012-13, but concerned over the rising fiscal deficit, the Finance Ministry has agreed for smaller increase, the source added.

Earlier, expressing concern over the rising fiscal deficit, the Planning Commission asked all ministries to restrain from proposing more than 15% increase in the Plan expenditure.

Fiscal deficit in 2011-12 is likely to exceed the Budget target of 4.6% of Gross Domestic Product (GDP).

The Commission has also asked all ministries to give Plan expenditure proposals, one exclusively for the next fiscal and the other for the entire 12th Five Year Plan period beginning April 1, 2012.

The central ministries have been asked to provide three different scenarios having 5, 10 and 15% increase in the plan expenditure.

The government had provided Rs 4,41,547 crore as GBS for plan schemes in 2011-12, which was 18.35% higher than the Budget announcement of Rs 3,73,092 crore for 2010-11.

 As per the Approach document to the 12th Plan, the GBS for 2012-13 should be raised by 14.68% to Rs 5,06,387 crore.

The document, which was approved in October by the country's apex planning body, National Development Council (NDC) headed by the Prime Minister, has also made a strong case for keeping the expenditure in check to bring down fiscal deficit to 3% level by 2016-17, the terminal year of the 12th Plan.

It pegged the GBS for 2013-14 and 2014-15 at Rs 5,83,305 crore and Rs 6,71,612 crore, projecting an increase of 15.19 and 15.14%, respectively.