Commentary/Mani Shankar Aiyar
How can a Budget which confesses failing to spend
Rs 100 billion development funds be the best Budget in decades?
In January 1997, the Planning Commission, located in Yojana Bhawan,
got the National Development Council to approve a
document entitled 'Approach Paper to the Ninth Five-Year Plan
(1997-2002)'. The first year
of the Ninth Plan is 1997-98. It is for this year that the
finance minister has submitted his celebrated Budget. Therefore,
the litmus test for the United Front's economic
policies is to see how far its Budget
contributes to the realisation of the goals in the Approach Paper
for the Plan's first year.
Notwithstanding the applause generated in certain circles for
the Budget, Yojana Bhawan is alarmed that the Budget parameters
undermine those of the ninth Plan. Planning Commission member Dr Arjun Sengupta has circulated a
paper in which he argues that ''the objectives of the Budget''
are ''distorting the priorities of development.''
Sengupta is something of a maverick. When the draft Approach Paper
was prepared at the end of 1996, he had put in a note of dissent.
Planning Commission Chairman Madhu Dandavate had then
persuaded him not to press his note. This time, however, most
significantly, instead of telling Sengupta to shut up or ship
out, Dandavate forwarded his recommendations in toto to Prime Minister H D Deve Gowda, without even waiting for an endorsement
of the arguments in the paper from other members.
No one
protested against the favoured treatment
to Sengupta's note. The reason clearly is that Sengupta's Yojana Bhavan colleagues
share his apprehensions. Unless the Budget is deployed as the instrument of translating
long-term policy into an annual work plan, the country will find
itself pursuing two contradictory economic policies at the same
time.
Sengupta points to the following inadequacies in the Budget which
are ''distorting the priorities of development:"
"The government's performance regarding planning in 1996-97 has fallen far short of what it intended,"
he has written. This confirms what this column and Dr Manmohan
Singh have been stressing all along. How
can a Budget which begins with a confession of failing to spend
"Rs 100 billion funds set aside for development" be the
"best Budget in decades?"
Sengupta provides exact
figures: as against a budget estimate of Rs 870.86 billion for 1996-97
as the central plan outlay (that is, state investment in development),
the revised estimate shows that the CPO will be no
more than Rs 777.81 billion over the year taken as a whole -- that
is, a shortfall of some 11 per cent.
Not only was there a shortfall in the government's development
outlay, "Budget support for the Plan fell short by Rs 23 billion."
True, it is standard practice to contain a Budget deficit
by slicing inessential consumption expenditure. But this is the first
time ever that a finance minister has decided to balance his books
by shortchanging essential development requirements.
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