The new Government is unlikely to substantially enhance the Plan expenditure for 2014-15 in the Budget to be unveiled next month because it needs to keep fiscal deficit in check.
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.
“In the present economic scenario, the new Government may not go for a substantial increase in the Plan expenditure over what was provided in the interim Budget in order to control fiscal deficit,” an official said.
After assuming office in 2004, the UPA Government in its regular Budget had pegged the total Plan expenditure at Rs 1,45,590 crore, which was not substantially higher than the Rs 1,35,071 crore provided in the interim Budget for 2004-05 by the previous NDA Government.
Similarly this time, the Plan expenditure could be a little over Rs 5,55,322 crore provided in the interim Budget for 2014-15 by the previous Government.
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 5,55,532 crore, for keeping a tab on the fiscal deficit. This was the second year in a row when the UPA Government cut Plan spending substantially to keep the fiscal deficit under control.
According to the latest Government data, the fiscal deficit in 2013-14 stood at 4.5 per cent of Gross Domestic Product (GDP), lower than the 4.6 per cent 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 Rs 5.08 lakh crore as against Rs 5.24 lakh crore projected in the revised estimate.
The lower fiscal deficit reduces the Government’s expenditure on interest payment and unlocks funds for investments in social welfare programmes as well as infrastructure development.
