Contrary to expectations, the Centre will be closefisted this fiscal, leaving no room for any populist scheme in the budget.
Since it would be the last budget before the country goes to Lok Sabha polls in 2014, the Centre was expected to announce some schemes in the 2013-14 budget to woo voters. Instead, it wants to focus on the implementation of its current schemes and will fall back on its direct cash transfer scheme to win over the electorate.
According to a communication from the finance ministry to the planning commission, the government wants to increase the gross budgetary support (GBS) for 2013-14 by only 5% as against a hike of 18% in the previous year. This means that the finance ministry will additionally provide only Rs26,051 crore for centrally-sponsored schemes, which will take central fund allocations to Rs5,47,051 crore in 2013-14. If this proposal is accepted, it will be UPA-II’s lowest hike in GBS in its five-year term.
Sources says this dismal increase in GBS will hit schemes like the rural job guarantee scheme, which already suffers from poor budget utilisation.
Various constraints on revenue generation have reportedly tied the government’s hands and forced it to tighten its purse strings. The slow growth in the current financial year has also had an impact on fiscal parameters.
In the mid-term economic review, the government had said it wanted to contain the fiscal deficit at 5.3% of the GDP (gross domestic product). In its report providing a roadmap for fiscal consolidation, the Kelkar committee had advised the Centre to keep its fiscal deficit at 4.8% in 2013-14 and to bring it down to 3% by 2016-17.