Sources said Bimal Jalan, the Planning Commission's member-secretary, had a discussion on the issue with finance minister P Chidambaram on Saturday. The meeting took place a day after the finance minister had told a full meeting of the plan panel that it was not possible to effect major changes in revenue collection.
Chidambaram had informed the members of the Commission that the government could extend upto Rs 300,000 crore to the ninth plan, which has an outlay of Rs 800,000 crore. This is a marginal rise over the level of budgetary support in the eighth plan, which has been estimated at Rs 280,000 crore atcurrent prices.
The plan panel has also told the government that lower budgetary support will mean starving the infrastructure sector. It is assuming a moderate rate of private investments in infrastructure in view of the experience of the eighth plan.
Planning Commission's deputy chairman Madhu Dandavate is also persuading his colleagues in the JD and other parties within the UF to agree on some difficult political decisions such as raising user charges on infrastructure and transport facilities. He attended the JD meeting at Surajkund yesterday.
A finance ministry source said there was nothing unusual about the finance minister's stand on the issue. "These issues are determined through a process of deliberations both at the official and political levels. The finance ministry usually starts with a low base and slowly agrees to a higher level of budgetary support as its confidence builds up," the source said.
The government will, however, wait a while to observe the initial responses from foreign investors to the planned divestment of a few PSUs like the Indian Oil Corporation and VSNL. Resources mobilised through the selloff will form a crucial element of the budgetary support to the plan. The ministry would have liked to trade off investments in the social sectors with promises from state Chief Ministers that they would support increases in user charges and state taxes.
One such trade-off took place at the chief ministers
