Govt may hike plan outlay by 2% in the budget

The new government may enhance the Plan expenditure for 2014-15 by around Rs 11,000 crore in the Budget next month, which would be about 2% higher than what was provided in the previous fiscal budget.

However, the proposed plan spending for the fiscal would be higher by about Rs 90,790 crore or 19% over the revised estimates for 2013-14.

The plan expenditure, or GBS (gross budgetary support), is the government spending on social sector schemes such as Bharat Nirman, rural employment guarantee and National Rural Health Mission.

"The new government may increase GBS by Rs 11,000 crore which would be around 2% higher than Rs 5,55,322 crore provided in the 2013-14 budget," a source said .

According him, the GBS figure has already been finalised for the General Budget which would be presented in Parliament next month.

A senior official said that there is little scope to increase the Plan spending over the last budget as the government is required to keep the fiscal deficit in check.

According to the latest government data, the fiscal deficit in 2013-14 stood at 4.5% of Gross Domestic Product (GDP), lower than 4.6% projected in the revised estimate, mainly on account of curbs on government expenditure.

The fiscal deficit, the gap between government's expenditure and revenue, in actual terms was at Rs 5.08 lakh crore as against Rs 5.24 lakh crore projected in the revised estimates.

Low fiscal deficit reduces the government's expenditure on interest payment.

The UPA government had cut the total Plan expenditure to Rs 4,75,532 crore for 2013-14 compared to the budget estimates of Rs 5,55,322 crore, to keep a tab on the fiscal deficit. The previous government cut Plan spending substantially for the second year in a row to keep the fiscal deficit under control.

After assuming office in 2004, the UPA government in its regular budget had pegged the total Plan expenditure at Rs 1,45,590 crore, as compared to Rs 1,35,071 crore provided in the interim budget for 2004-05 by previous NDA government.

Similarly, this time, the Plan expenditure would be a little higher over Rs 5,55,322 crore provided in the interim budget for the 2014-15 by the previous government.