The Telegraph
Since 1st March, 1999
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Atal steps in to end deadlock over plan funds

New Delhi, Jan 30: Prime Minister Atal Bihari Vajpayee will personally intervene in the battle over the Union budget’s biggest spend — plan expenditure.

Vajpayee, alarmed by finance minister Jaswant Singh’s decision to slash plan allocations by a quarter to Rs 1,02,000 crore in the coming budget, has invited Singh to a meeting this evening to try and cajole him into giving more for his pet plan schemes to give a human face to reforms.

Top PMO officials said the effort is to reach somewhere between Planning Commission deputy chairman K.C. Pant’s demand for Rs 1,34,000 crore towards plan schemes for the fiscal 2003 and the finance minister’s offer of a 25 per cent cut.

Pant lobbied to get Vajpayee to intervene on this issue during a trip they made last week to the Andamans. Vajpayee is believed to have agreed with Pant’s observation that unless the BJP government spends and shows some positive work which affects the common man, the coming elections to various state assemblies might be a washout for the party.

Normally plan schemes account for between 25 and 33 per cent of the total annual expenditure of the government. Economists have traditionally argued that the higher the plan spend, the higher the GDP growth and lower the poverty figures. But demands of subsidy expenditure, wages and salaries of a huge bureaucracy and interest payouts often mean cutbacks in plan spend.

This year the finance ministry wants to drastically cut plan allocation because continued economic uncertainties could hit tax collections, while larger demands from the defence ministry and greater proposed expenditure on policing and judiciary among other things could sap up much of the funds available. But Pant, who has been fighting a running battle with Singh on the issue, has pointed out that besides hitting central schemes it would see state governments “already under (financial) strain” sinking further into the red.

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