INDIA BUSINESS WORLD - FEBRUARY 2007
The Month that was ...

FINMIN NOT TO RELEASE ENTIRE PROPOSED GBS

FINANCE ministry has decided not to release entire amount of proposed Rs 2,10,000 crore gross budgetary support (GBS) to the ministries as part of government's exercise to maintain fiscal discipline. It is likely to make phase-wise release of funds in the next fiscal (2007-08).

Out of a total GBS, Rs 10,000 crore would be set aside and depending on the expenditure made by various ministries and departments, more funds will be made available. This exercise would be undertaken at the revised estimate stage, a source in the government said.

The move will help in curbing the habit of several departments which do not utilise funds evenly in a financial year and tend to spend all amounts towards the end of the fiscal.

The proposal, however, is likely to affect large number of important government schemes. For example the National Agriculture Insurance Scheme is likely to get a GBS support of only Rs 500 crore that would make its broadbasing difficult. Likewise Rainfed Area development Programme is likely to get only Rs 10 crore token allocation during 2007-08, with a notional provision of Rs 675 crore for consideration during revised estimate stage.

Even the model village programme for SC workers is now likely to get no GBS support fro next fiscal. However the scheme would be retained for allocation of funds during 2008-09.

In terms of GBS for central government ministries, the phased programme would mean that department of telecommunication would get only about Rs 340 crore for next fiscal with a provision of Rs 391 crore for expanded programme at RE stage. Department of Information and Technology will also get a marginal increase in GBS to Rs 1350 crore and a provision of Rs 1500 crore would be made for expanded stage.

Ministry of Earth Sciences will get Rs 690 crore with provision of Rs 250 crore for RE stage. In all The Centre is likely to plan expenditure worth Rs 9650 crore for central ministries and about Rs 600 crore state programmes pending.