New plan to see marginal rise in gross budgetary support

With the government increasingly facing resource crunch, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Saturday said the total funds available for planned expenditure as a percentage of Gross Domestic Product (GDP) would not rise sharply in the first three years of the 12th Plan year-on-year.

"Our estimates show Gross Budgetary Support (GBS) as a percentage of GDP will not increase much during the first three years of the 12th Plan, but will start rising in the last two years," Ahluwalia told reporters after a meeting of the full Planning Commission.

Officials said the gross budgetary support would remain stagnant at 4.92 per cent of GDP in the first year of the 12th Plan, compared to the previous year. The percentage will rise slightly to 4.95 in the second year, and then to 4.98 per cent. In the penultimate year of the plan, GBS will rise to 5.35 per cent of GDP and to 5.75 per cent in the final year.

These projections have been made on the basis of 14 per cent GDP growth in nominal terms, comprising 9 per cent in real terms and 5 per cent inflation rate.

He said a working group constituted under the chairmanship of Chief Economic Advisor Kaushik Basu had suggested an increase in tax revenues during the 12th Plan period, but not much in non-tax revenues.

Ahluwalia said a strong feeling was expressed at the meeting that the plethora of central sector schemes should be restructured which should be reflected in the approach paper.

Skill development, health, education, infrastructure and governance are the key issues the 12th Plan will focus on.

Minister of State for Planning Ashwani Kumar said a lot of focus was also laid on research in transgenic crops during the full plan meeting which was essential for food security of the nation.