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GBS may be increased by 15 per cent in 2010-11

Last Updated: Monday, January 11, 2010 - 22:55

New Delhi: The government is likely to raise the Gross Budgetary Support (GBS)-- the amount of assistance provided by the Centre for Plan schemes-- by 15 per cent to Rs 2.60 lakh crore during 2010-11.

The issue was discussed at a meeting on Monday between Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The central ministers this time has been demanding 82 per cent increase in the GBS, while the Planning Commission insisted on 18 per cent increase.
In view of the urgency to contain fiscal deficit, Mukherjee indicated to the Planning Commission`s deputy chief that it would not be possible to raise the GBS beyond 15 per cent over the estimates of the 2009-10, sources said.

Mukherjee, sources added, also asked the Commission to focus on the flagship programmes like Bharat Nirman, mid-day meal scheme and the National Rural Employment Guarantee Act while approving the annual plans of ministries for the next fiscal.

In the Budget 2009-10, the government had provided a budgetary support of Rs 2.24 lakh crore for Plan schemes of different ministries.
Commenting on high demands being made by central ministries, Ahluwalia had earlier told reporters that they always ask for more while the Commission "tries to match their demands with available resources".

The final figures for GBS are likely to be announced in the Budget expected to be unveiled on February 26.

In value terms, the increase in the GBS for 2010-11 would be about Rs 36,000 crore over the Budget estimates of 2009-10.

During the current fiscal, the Government raised the GBS by about Rs 60,000 crore over the Budget estimates of the previous fiscal, with a view to help the economy to combat the impact of the global financial meltdown.

The Finance Ministry`s insistence on moderate increase in the GBS for the 2010-11 is aimed at containing the fiscal deficit which is expected to increase to 6.8 per cent of the GDP, up from 6.2 per cent in the previous fiscal.

Following the global financial meltdown, triggered by the collapse of America`s iconic banker Lehman Brothers in September 2008, the Government had provide three stimulus packages to help the industry fight the crisis.

These stimulus packages, which involved tax cuts and raising public expenditure, had cost the exchequer about Rs 1.86 lakh crore.

As the high level of fiscal deficit cannot be sustained, the Finance Ministry would be trying to curb expenditure and focus on additional resource mobilisation in the next budget, the preparations for which are going on.


First Published: Monday, January 11, 2010 - 22:55
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