Finance Minister P Chidambaram’s fiscal consolidation axe falling on plan expenditure across the sectors has unnerved Planning Commission, which said on Thursday that there were many other ways to meet fiscal deficit.
"There are many ways of meeting it (fiscal deficit objectives) and that is what they (Finance Ministry) must be balancing off right now," Planning Commission Deputy Chairman Montek Singh Ahluwalia said. According to sources, the Finance Ministry is in favour of a meagre hike of around 6 per cent in the plan expenditure to the gross budgetary support (GBS) for next fiscal over budget estimate of the current financial year. GBS is the government spending on social sector schemes such as Bharat Nirman, rural employment guarantee and National Rural Health Mission.
The cut in GBS may come in the wake of the government struggling to meet the gaping divide between its expenditure and revenues.
According to reports, lower GBS is also likely to cut allocation for rural development by Rs 20,000 crore and that for defence by about Rs 10,000 crore.
Officials in the Finance Ministry, however, said that the focus will be on bunching several welfare schemes to reduce overhead costs of projects.
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