The Gross Budgetary Support (GBS) to the Central Plan for 2013-14 may be raised just enough to neutralise the effect of inflation, sources close to the development said.
Finance Minister P. Chidambaram will announce the final figure on February 28 when he will present the Budget.
GBS to central plan provides allocation for various flagship schemes. It is finalised after intense discussion between the Finance Ministry and the Planning Commission. With a discouraging picture on the revenue front, there is intense pressure to keep the increase in the GBS to a minimum. “The Planning Commission’s approach is aspirational, so it has advocated higher outlay, but going by the current financial situation, the increase may be as little as 5-7 per cent over budget estimate of 2012-13,” a senior government official told
A 5-7 per cent increase over BE will take the GBS for 2013-14 to Rs 4.64-4.72 lakh crore.
However, there is a possibility of a 28-30 per cent cut in the actual GBS extended during the current fiscal, and if it happens, the increase in GBS for next fiscal could be seen much higher in percentage terms, the official explained.
Even in 2011-12, the revised estimate for GBS was lower than the budget estimate.
A lower revised estimate will help the Finance Ministry’s effort to keep the fiscal deficit within the revised target of 5.3 per cent for 2012-13. At the same time, the Ministry has already announced its intention to keep the fiscal deficit target for 2013-14 at 4.8 per cent. Such a low deficit will require reduced expenditure.
This is required as the Finance Ministry is having a tough time on revenue front.
The rate of growth of tax collection is less than the target, the numbers so far suggest.
The non-tax revenue, especially realisations from spectrum auction and disinvestment, has also been lower than the estimates. Under such a situation, the Ministry has focused on expenditure cuts.