| (From left) K. C. Pant, Sunil Kanoria, president of Merchants' Chamber of Commerce, and WBIDC chairman Somnath Chatterjee in Calcutta on Thursday. Picture by Kishor Roy Chowdhury
New Delhi, Jan 16: Finance minister Jaswant Singh has informed Plan panel deputy chairman K. C. Pant that he will be forced to slash plan allocations by a quarter to Rs 1,00,000 crore in the coming budget.
Pant had asked the finance minister to allocate Rs 1,34,000 crore towards plan schemes for the fiscal 2003. Top officials said Pant was unhappy with the decision and would meet Prime Minister Atal Bihari Vajpayee asking him to intervene.
Finance ministry officials said the decision to drastically cut down plan allocation has been taken keeping in view the continued economic uncertainties, which could hit tax collections, larger demands from the defence ministry and greater proposed expenditure on policing and judiciary.
Pant had already warned Vajpayee that the inability to spend on key plan schemes could result in the death or severe curtailment of his pet schemes to give a human face to reforms by spending on poverty reduction measures, social welfare schemes, schemes to reduce unemployment and retrain retrenched workers of sick private and public sector companies and even infrastructure building schemes.
More importantly, it would see state governments “already under (financial) strain” sinking further into the red. Money for plan schemes are passed on to central ministries and state governments who are supposed to fund development work from it.
Pant’s says this will mean “grave social consequences” which could hit the ruling coalition's chances in elections to nine state Assembly elections this year including Delhi, Rajasthan and Madhya Pradesh.
Lower funding will give state chief ministers a handle to blame the Centre for the lack of development and the BJP for being against the state in question. Pant has first hand experience of this. In Uttarakhand, he was accused at public rallies of being against the state simply because he had asked the state government not to build up a subsidised state-run bus service.
Finance ministry and Planning Commission top brass have held meetings over the last week on the issue of plan support in this budget but the matter has reached a deadlock.
Meanwhile, at a seminar in Calcutta today, Pant said: “It is ironic that at a time when as a nation we are embracing globalisation, we persist with local protectionism. Unless we reverse this process, parts of our country will be more closely integrated with the global economy than with neighbouring states.