Hyderabad, April 15: Chief Minister K Rosaiah who is camping in Delhi is undestood to be keen on impressing upon the Planning Commission of India for approval of the State Annual Plan without cuts on the ground that subsidies being given are on the higher side.
He is scheduled to confer with the Planning Commission members on April 16. Rosaiah will press for the State’s case when he meets Congress biggies Pranab Mukherjee, P Chidambaram and Veerappa Moily ahead of the meeting with the members of the Planning Commissione.
Officials of the State planning department are keeping their fingers crossed over the outcome of the meeting on April 16.
The government ususally submits the annual plan in November so that it can be cleared by the Planning Commision in January, leaving just enough time for the State to prepare budget proposals. Depending on the approval, the State Government makes allocations in the budget for the following fiscal.
But this year, the annual plan for 2101-2011 did not get the Planning Commission’s approval because the commission has raised several queries on subsidies and suggested that they be reduced. According to sources, the commission is against individual subsidies like power subsidy and health insurance (Rajiv Arogyasri). It asked the government to cut individual subsidies and spend more on infrastructure, long-term programmes and on productive sectors like agriculture.
The commission wants an increase in allocations to programmes like Rashtriya Vikas Yojana from Rs 430 crore to Rs 500 crore and the education and health sectors.
The State Government has proposed an Annual Plan of Rs 40,000 crore for the 2010-11 financial year.
Of that, the Centre has to bear Rs 36,000 crore and the State Rs 4,000 crore. Going by the government’s experiences, the State is unlikely to get the commission’s approval for the Centre’s share.
The Centre had imposed cuts in the annual plan of 2009-10 up to Rs 7,000 crore. While the State had proposed a plan outlay of Rs 44,000 crore for that year, the Centre cut Rs 4,000 crore initially and Rs 3,000 crore again, thus bringing down the plan outlay to Rs 37,000 crore. The Centre is also not happy with the State’s borrowing in the open market.
The State Government has to take loans according to the Fiscal Responsibility and Budget Management rules.
The State Government and the Planning Commission also differ on the size of the State GSDP. While the State contends that the GSDP is Rs 4 lakh crore, the commission says it is only Rs 3.90 lakh crore.
With this, the borrowing capacity of the State is coming down. This too may figure at Rosaiah’s meeting with members of the commission.
Experts say the State Government’s planning department has failed to prepare a convincing annual plan and its officials are unable to answer the questions being raised by the commission.
—Agencies