Planning Commission seeks 18% hike in budgetary allocations

To meet the expansionary aspirations in various sectors, especially in education, the Planning Commission has asked the finance ministry for a substantial hike in the budgetary support for Central ministries and budget departments. The request has been made for the coming fiscal.  

The proposed hike is much lower than the steep increases demanded by various ministries and departments. The Plan panel has asked an 18 percent increase in the budgetary support that will be used for various social sector schemes, together with funding the right to education. 

If the proposed demand is met, the Central Plan would then be burdened with Rs 2.82 lakh crore against Rs 2.39 lakh crore last year. Notwithstanding the current demand, various ministries and departments have asked for resources to the tune of Rs 4.3 lakh crore. In that case, the amount would have been around 80 percent higher than the budgetary estimates of last year.

Reacting this week on the steep demand made by Central ministries and departments, Montek Singh Ahluwalia, Planning Commission deputy chairman, played it down as a normal process. The Commission is soon set to have a meeting on budgetary resources with the finance ministry. The human resources development ministry is slated to receive the most of the hike for being in charge to implement the Right to Education (RTE) Act.

Contrary to the existing plan allocation, the department of higher education has sought 118 percent increase in budgetary support. More so, school education department has set its eye for an increase of 110 percent. Ministry of housing and urban poverty alleviation, civil aviation, heavy industries, chemicals and petrochemicals and telecom are few other ministries and departments expecting big increases in their budgetary supports.

When all sectors seem to be in an expansionary mood, the demand seems quite legitimate. The hike demanded is only slightly more than the 10-12 percent increases granted in most years, thus there is unlikely to be a major issue.