Planning commission may lower spending for 11th plan
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Last Updated: Thursday, September 17, 2009, 23:36
  
Mumbai: The Planning commission on Thursday hinted at contraction of plan programmes in the remaining period of the 11th plan ending 2012, due to lesser budgetary support in the face of falling growth.

With the average growth expected to decline to 7.8 per cent from the projected 9 per cent during 2007-12,the planning commission is likely to fine tune the plan for the remaining period, its member Narendra Jadhav said.

This fine-tuning and reprioritizing has to be done in the mid-course because of lesser gross budgetary support(GBS) available for the plan programmes owing to lower average growth during 2007-12, Jadhav told reporters.

"The gross budgetary support was formulated assuming a 9 per cent growth (during 2007-12)...now the average growth is likely to be 7.8 per cent and this meant revising downwards the gross budgetary support," Jadhav said.

Gross Budgetary support is the money allocated to execute plan programmes in the budget every year and the availability of funds for GBS depended upon the revenue mobilisation efforts of the Government.

Whenever there is a fall in growth, there is a corresponding fall in revenue collection.

India is likely to grow at 6.3 per cent in FY 10 despite the impact of the global financial crisis and the drought, a he said.

"We estimate that growth this year (2009-10) will be 6.3 per cent," Jadhav said.

The growth is likely to improve further in the next financial year to 8 per cent and may bounce back to nine per cent in the year after, Jadhav said while delivering a lecture.

However, the rainfall in September remains critical to sustain a 6.3 per cent GDP growth, Jadhav said.

"If it not rains well in September, the growth may decline to six per cent," he said.

Reserve Bank, in it annual report last month, had maintained the growth target of 6 per cent for FY 10 despite weak monsoon, saying that economic impact of the drought will not be as bad as expected.

Hit by the financial crisis, advanced economies are likely to grow in negative in the rest of the current financial year, he said.

Jadhav noted that a 7.8 per cent average growth is "truly impressive" in spite of the double-whammy of slowdown and drought, he said.

Bureau Report


First Published: Thursday, September 17, 2009, 23:36


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