Manmohan Singh wants more dole for social schemes

The UPA government may come out with yet another common man’s Budget, at least where social sector spending is concerned.

Despite facing a steep fiscal deficit, prime minister Manmohan Singh is learnt to be pushing for greater allocation to the government’s flagship schemes such as Jawaharlal Nehru National Urban Renewal Mission, Sarva Shikhsha Abhiyan and Rural Health Mission.

The objective of these schemes — numbering 15 in all — is to boost social sector development.

The PM has advised a minimum 15% hike in gross budgetary support (GBS) to such schemes, overruling the finance ministry, which suggested an 11% raise, according to a source familiar with the development.

The PM has insisted that flagship schemes should be taken care of even if it meant surpassing the scheduled allocation for the Eleventh Plan (2007-2012).

At a recent pre-budget meeting, the Planning Commission had made a case for GBS in the range of Rs 3.83-3.86 lakh crore for 2010-11, which is an 18-19% hike over the previous year’s allocation.

The finance ministry argued that fiscal consolidation was more important and that it could provide only around Rs 3.62 lakh crore, or a hike of about 11%.    

Subsequently, Singh is believed to have written to the finance ministry saying GBS needs to be hiked by at least 15%.

“The Prime Minister’s Office (PMO) has conveyed the message that flagship schemes should not be compromised,” said the source.

The finance ministry’s concern comes from the fact that it is making an all-out effort to bring down the country’s fiscal deficit, estimated at 6.8% of gross domestic product in the current fiscal.

Essentially, this involves cutting down budgetary allocations for non-performing ministries and social sector schemes.

North Block had recently asked all ministries and government departments to contain excess expenditure to the bare minimum.
In a directive issued last week, expenditure secretary Sushama Nath had drawn the attention of the ministries of railways, mines, defence, corporate affairs and the department of economic affairs “to ensure that the phenomenon of excess expenditure is not repeated”. Many of the flagship schemes have performed poorly, making a case for reduced budgetary allocation.