No control of Centre and state on fiscal deficit

     Raipur, February 16, 2009: The Centre today proposed a total expenditure of Rs 953,231 crore for the financial year 2009 and 2010 in its interim budget, but it was silent on the issues relating to the underdeveloped states like Chhattisgarh.

     Of the total expenditure of Rs 953,231 crore, Rs 285,149 crore is under Plan and Rs. 668,082 crore under the Non-Plan sector, according to the Interim Budget 2009-10.

     The budgetary support to the Plan sector for 2009-10 has been increased for the Departments of Rural Development, Road Transport & Highways, Railways, Information Technology and Industrial Policy & Promotion and the Ministry of Power, with a view to maintain the fiscal tempo to address the economic slow down and meet the requirements of rural and infrastructure development, according to sources of the Government of India.

    Rs 30,100 crore has been allocated to National Rural Employment Guarantee Scheme (NREGS) in 2009-10.

     Similarly for Sarv Shiksha Abhiyan, an allocation of Rs13,100 crore have been proposed. About 98 per cent of the habitations have been covered by primary schools in the country and the focus was now on improving the quality of elementary education, the budget report said. An allocation of Rs 8,000 crore has also been made for the Mid-Day Meals Scheme.

     An allocation of Rs 6,705 crore has been proposed for the Integrated Child Development Scheme (ICDS) in the country.

     Rs11,842 crore have been allocated for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Under the Mission, 386 projects amounting to Rs39,000 crore had been sanctioned as of December 31, 2008.

    Bharat Nirman, the time bound plan for building rural infrastructure, has been allocated Rs 40,900 crore where as National Rural Health Mission has been allocated Rs 12,070 crore. The programme aims to bring about uniformity in the quality of preventive and curative health care in rural areas.

     Rajiv Gandhi Rural Drinking Water Mission is envisaged to supply safe drinking water to uncovered habitations and slipped back habitations. An allocation of Rs.7,400 crore has been made for this programme. Rs1,200 crore have been assigned for Total Rural Sanitation programme.

     However, for every rupee that the government will spend next year, 20 paisa will go toward interest payments owing to increased borrowing, while 18 paise would be spent on central plan.

     In an attempt to boost the economy, government will spend 9 paise on subsidies, while on defence the expenditure would be 13 paise against 11 paise last year.

     Other non-plan expenditure would account for 14 paise and states’ shares of taxes and duties would take away 15 paise of every Rupee earned.

     However, the interim Budget was silent on the issues being confronted by the underdeveloped states like Chhattisgarh.

     Despite demands from various states, the support price for paddy had not been hiked nor the interest rate on loan to farmers had been decreased, when over 80 per cent of the total population of Chhattisgarh is dependent on agriculture and paddy was their main crop.

     Chief Minister Dr Raman Singh also said the interim budget had failed to provide relief to the poorer section of the society or that of the farmers as the interest rate for farmers would continue with seven per cent, when it was three per cent in Chhattisgarh.

     Under the national widow pension scheme persons between 40 and 64 age would be benefited, which was insufficient. The state was also giving widow pension to the people above the age of 18 and in addition to that the people above the age of 60 also get pension.

     Another important indication was that the states and central, both the budgets were having high percentage of deficit in their budgets, which was never a good indication for the economy.