Projects Facing Last-Mile Glitches May Continue To Get Last-Minute Aid

The finance ministry has proposed a special allocation to fund projects facing last-mile problems as a regular feature in the Budget. The allocation will ensure that the latent investment possibilities in pending projects, particularly in the infrastructure sector, are realised soon. For the year 2002-03, it proposes to allocate a sum of Rs 5,000 crore for the purpose. Top sources said the number of such projects is about 100 in the current fiscal.

This is likely to be a key issue in tomorrow's discussion on the gross budgetary support (GBS) for 2002-03 between finance minister Yashwant Sinha and the deputy chairman of the Planning Commission, KC Pant.

However, there is a dispute between the ministry and the commission on the size of the GBS. While the finance ministry says it should be pegged at Rs 1,05,000 crore, inclusive of the allocation for last-mile problems, the latter has asked for at least Rs 1,13,000 crore.

The Planning Commission is, in fact, in favour of additional allocation for different sectors like power, irrigation and education, where the government has announced new schemes. This is necessary to fulfill the Tenth Plan yearly estimates, as according to sources, while the original Plan size was worked out taking into account the recommendations of the Montek Singh Ahluwalia committee on power reforms, the power ministry has now come up with proposals which require additional expenditure. The commission is of the view that any additional proposals should be covered by additional allocations for the Plan.

The government had made an allocation of Rs 3,600 crore for the projects with last-mile problems in the course of the current fiscal but even here Yojana Bhawan says the allocation has disturbed the ratio of Plan allocation between central ministries and the states.

The commission is also expected to suggest delinking of disinvestment proceeds from the Plan size.

This year, Rs 5,000 crore of the Plan allocation was to come from disinvestment. None of that amount has come in as yet, reducing the effective Plan size to around Rs 95,000 crore. The commission is instead expected to propose the setting up of a non-lapsable fund to house disinvestment proceeds which can be a part of the Plan size for the subsequent years.

The meeting will also discuss the allocation for the Tenth Five-year Plan. The Planning Commission has estimated a Rs 7,10,000 crore allocation for the Tenth Plan period (2002-03 to 2007-08).