Montek: Fiscal deficit is burgeoning plan exp accordingly

Union Budgets of total outlays is Rs 1665297 Cr of which non plan budget is of order of Rs 1109975 Cr and plan budget scores to Rs 555322Cr and the fiscal deficit amounts to the order of plan is Rs 542499 Cr. Thus Planning Commission rightly  said it would have been little irresponsible for it to pester government for allocating more funds for Plan expenditure when fiscal deficit is burgeoning.
 

"I think it will be little irresponsible for the Planning Commission to start pestering on a Plan in a period when the fiscal deficit has to be brought under control," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters in a post-Budget interaction in New Delhi on Friday.

He further said that if the government was allowed to run with a high fiscal deficit, it would have been a crisis.

"... and frankly if we allowed that (high fiscal deficit) to go, you would not survive without a crisis. We will be in a crisis," Ahluwalia said.

Government's fiscal deficit in 2012-13 has been contained at 5.2 percent of the GDP (gross domestic product) from estimate of 5.3 percent. For 2013-14, government targets to maintain fiscal deficit at about 4.8 percent of the GDP.

The government has raised Plan expenditure for 2013-14 by 6.58 percent to Rs 5.55 lakh crore from the Budget estimates of Rs 5.21 lakh crore in the current fiscal.

However, the jump in the Plan expenditure for 2013-14 is 29.4 percent when compared with the revised estimates of the same for current fiscal at Rs 4.29 lakh crore.

"In the budget for 2012-13, the estimate of Plan expenditure was too ambitious and the estimate of Non-Plan expenditure was too conservative. Faced with huge fiscal deficit, I had no choice but to rationalise expenditure. We took a dose of bitter medicine. It seems to be working," Chidambaram said in his Budgetary speech on Thursday.

The Planning Commission had asked for a raise of about 15 percent in the Plan expenditure for 2013-14 over budget estimate for the current fiscal.

Hopeful of better GDP growth in 2013-14 fiscal, says Montek

Expressing disappointment at poor third quarter GDP growth, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said he is hopeful of a better show next financial year as the Budget has been made on an estimate of 6.5 percent growth.

"The GDP figure of 4.5 per cent for the third quarter of the current fiscal is of course disappointing. I hope the figures will be better than this because these are preliminary estimates...but the government has agreed that this year our growth performance has been somewhat weak," Ahluwalia told reporters in New Delhi on Friday.

In October-December quarter, growth slipped to the decade's lowest owing to weak performance of agriculture, mining and manufacturing sector.

"Now the real issue is if we can improve the growth in the year 2013-14. And we hope that we will be able to improve it. The budget has been made on an estimate of 6.5 per cent growth in the next fiscal," Ahluwalia said.

Referring to Finance Minister P Chidambaram, he said: "Many things are in process and until those things are final, he cannot announce those things in the Budget. But we hope whatever are the things in process, decision will be taken in the next 3-5 months and we will be able to know what can be done.

"The Finance Minister himself said he is doing something for financial inclusion and there are many other things as well."

In reply to a question about benefits of Direct Benefit Transfer scheme, Ahluwalia said it will be good for the intended beneficiaries.

"I think DBT scheme will work for the benefit of the intended beneficiaries. It will remove the middlemen and money will be transferred directly to the beneficiary account. And the second thing is that if these transfers are done on the basis of Aadhaar numbers, duplication will be avoided and this will be a very important thing," Ahluwalia added.