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Social schemes to get fiscal eye

Financial position, spending capacity to play a big role, say sources

BS Reporter  |  New Delhi 

Arun Jaitley

The government might take a hard view on several social sector schemes, including the Prime Minister's pet projects of Digital India and Pradhan Mantri Krishi Sinchaee Yojana in the coming Budget for 2015-16.

These might get a renewed thrust but perhaps not in the form of a significant increase in Plan allocation. New ways in which funds will be raised for such schemes, like Namame Gange, might be announced, officials said..

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The increase in Plan allocation for programmes over what were announced in the first Budget of the Narendra Modi government is expected to be more in the form of more fund transfer to states and lowering the Centre's role in running the scheme. Also, absorptive capacity of the ministry and its actual expenditure on the programme will play a big role in determining the final Budget estimate for the projects concerned. For instance, for the Krishi Sinchaee Yojana, the government had allocated around Rs 1,000 crore in 2014-15. If spending this year is only around Rs 700 crore, then only this much is likely to be allocated for the central ministry; rest of the money for the programme might be transferred directly to the states.

There is a possibility that Finance Minister Arun Jaitley add a caveat to the cuts, that outlay for ministries and departments will be increased in the middle of the financial year, depending on their spending capacity.

The overall Plan expenditure of 2015-16 is expected to be only marginally more than the revised estimate of 2014-15, which by all counts should be 20-30 per cent less than the Budget estimates. The total Plan expenditure in 2014-15 was pegged at Rs 5,25,000 crore in the Budget Estimate. Of this, Rs 4,53,502 crore was revenue expenditure and Rs 1,21,497 crore was capital expenditure.

Central support to states and Union Territories' Plan in 2014-15 jumped to Rs 3,38,408 crore fromRs 1,19,039 crore in 2013-14, a rise of 184 per cent, mainly because of restructuring of Centrally Sponsored Schemes (CSS). A total of 145 CSS was brought down to 66, resulting in a higher share of Plan funds being sent to the state's treasury directly.

As a consequence, the central government's Budget support to the Plan went down from Rs 3,56,493 crore in 2013-14 to Rs 2,36,591 crore in 2014-15, a drop of 34 per cent.

Officials in the know said changed priorities and the new method of fund transfer will be reflected in the ongoing mid-term appraisal (MTA) of the 12th five-year Plan (2012-13 to 2016-17). The appraisal, earlier in doubt because of lack of clarity over the role of the erstwhile Planning Commission, has been taken up in earnest after the body was transformed into NITI Aayog.

Jaitley had assured that neither the 12th five-year Plan nor the MTA was being abolished even as the Commission ceased to exist.

Officials said they'd been directed to incorporate the ideas and schemes of the government in their sectoral appraisals and the changed funding pattern in the way-ahead sections with each chapter.

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First Published: Mon, February 23 2015. 00:40 IST