Massive allocation in social sector schemes in interim Budget

New Delhi, Feb 16 (PTI) Avoiding any tweaking with tax
and duty rates, the Indian interim Budget Monday made a
massive allocation of Rs 1,31,317 crore for the ruling UPA
Government's flagship programmes for the common man ahead of
the general elections and to perk up the economy from the
effects of global downturn.

Doing a holding operation with a vote-on-account for four
months of 2009-10, Pranab Mukherjee, who holds the additional
portfolio of finance, resisted the temptation of giving sops.

Later he himself told reporters that he did not have the
parliamentary mandate to "tweak" rates and he had done
whatever he could under Constitutional constraints.

In view of the fact that security environment has
deteriorated considerably with the Mumbai terror attacks
giving an entirely new dimension to cross-border terrorism,
the Budget increased the allocation for defence to Rs 1,41,703
crore, a hike of about 35 percent over last year's allocation
of Rs 1,05,600 crore.

Of the massive spending projected on social sector
schemes that will have an impact on 'Aam Aadmi' (common man),
the Bharat Nirman scheme gets Rs 40,900 crore and the National
Rural Employment Guarantee Scheme gets Rs 30,100 crore in the
coming year.

The rest of the social sector funds go to Sarva Siksha
Abhiyan (Rs 13,100 crore), Integrated Child Development Scheme
(Rs 6,705 crore), Jawaharlal Nehuru Urban Renewal Scheme (Rs
11,842 crore), National Rural Health Mission (Rs 12,070
crore), Rajiv Gandhi Rural Drinking Water Mission (Rs 7,400
crore) and Total Rural Sanitation Programme (Rs 1,200 crore).

In view of the fact that conditions in the year ahead are
not likely to be normal, Mukherjee said a fiscal deficit of
5.5 percent of the GDP -- Rs 3,32,835 crore -- is inevitable.

"We will return to Fiscal Responsibility Budget
Management targets once the economy is restored to its recent
growth path," he said.

The Minister also said while the proposed provisions are
appropriate for a vote-on-account, he would like to point out
that Plan expenditure for 2009-10 may have to be increased
substantially at the time of the presentation of the regular
budget "if we are to give the economy the stimulus it needs to
cope with the global recession that is likely to continue
through the current year.

"In the current environment, there is a clear need for
contra-cyclical policy and it calls for a substantial increase
in expenditure in infrastructure development where we have a
large gap and in rural development where the programmes such
as Bharat Nirman and NREGS are playing a vital role," he said.

Aiming at enhancing expenditure on schemes to provide
employment and lift the economy, the interim Budget for
2009-10 has planned a total expenditure of Rs 953,231 crore
comprising Rs 285,149 crore in plan and Rs 668,082 crore in
non-plan spending.

To counter the negative impact on exports due to the
global economic crisis, the interest subvention of two per
cent on pre and post shipment for certain employment sectors
is proposed to be extended.

The revised estimates for tax collections during 2008-09
project a fall of nearly Rs 60,000 crore due to the economic
slowdown.

Mukherjee said since the scope for revenue mobalisation
is bound to be limited in a period of economic slowdown, any
increase in plan expenditure will increase the fiscal deficit.

"Indeed, we may have to consider, the additional plan
expenditure from 0.5 percent to 1 percent of GDP and gear up
our systems accordingly," Mukherjee said in his 90-minute
speech.

To ensure continuity in financing of rural infrastructure
projects, the Minister proposed RIDF-15 with a corpus of Rs
14,000 crore and continuation of the window for rural roads
with a corpus of Rs 4,000 crore. PTI VSC
AM
NNNN