New Delhi, Feb 15: Trying to fight global slowdown
and gearing up for the forthcoming elections, the UPA
government's interim Budget is likely to step up expenditure
on its flagship programmes, rural development and housing,
doubling the fiscal deficit to 5 per cent during 2009-10.
The interim Budget, to be presented by External Affairs
Minister Pranab Mukherjee who is currently holding the charge
of Finance Ministry, is also likely to announce short-term
measures for exporters reeling under the impact of a global
slowdown.
The government in the last Budget has fixed the fiscal
deficit for the current fiscal at 2.5 per cent of GDP, which
is likely to be raised to 5 per cent for the next fiscal,
primarily on account of higher allocations towards the
government's flagship schemes like the Bharat Nirman and the
National Rural Employment Guarantee Scheme.
To provide focus on urban infrastructure, the government
may expand the ambit of the Jawaharlal Nehru National Urban
Renewal Mission (JNNURM) to include more districts. At
present, the scheme is operational in about 60 mission cities.
The other focus of the Budget is likely to be on rural
development which may witness allocations going up to more
than Rs 55,000 crore from Rs 39,000 crore, an increase of
over 40 per cent.
With the government announcing two stimulus packages and
revenues not forthcoming due to slowdown, the fiscal deficit
has already crossed four per cent till December and may be
revised to over six per cent of GDP for this fiscal, going by
the indications.
The interim Budget may also provide a token allocation
of Rs 100 crore for kick starting the Unique Identification
(UID) scheme to provide a specific number to every citizen.
In addition, the infrastructure finance company IIFCL
may be authorised to raise money through tax-free bonds, while
three state-owned banks -- Central Bank of India, Uco Bank
and Vijaya Bank -- are likely get fresh funds.
According to indications, IIFCL could be allowed to raise
around Rs 30,000 crore of tax-free bonds, the three PSU banks
would get additional capital of Rs 2,150 from the government.
The allocations for the agriculture, textile and tourism
are likely to be retained at the current levels, though in
case of flagship schemes the outlays are likely to be raised
to Rs 1,23,000 crore from Rs 90,000 crore in the Budget for
2008-09.
The total gross budgetary support (GBS), which represents
the expenditure towards Plan schemes and transfer of resources
to states, may be increased to Rs 2,85,000 crore from Rs
Rs 2,43,000 crore in the current year.
The GBS for the current year is likely to be revised to
Rs 2,74,000 crore mainly on account of stimulus packages and
transfer of resources to the states.
Bureau Report
First Published: Sunday, February 15, 2009, 00:00