The Telegraph
Since 1st March, 1999
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Job plan rocks budget balance

New Delhi, Dec. 9: The finance ministry today hinted that the National Employment Guarantee Scheme (NEGS) ' the Centre’s flagship scheme ' may have overshot expenditure projections, sending budget numbers awry.

“The expenditure budget is expected to come under pressure because the government has to supply foodgrain in employment guarantee programmes and the Sampoorna Gramin Rozgar Yojna,” the ministry said in its mid-year review of the economy tabled in Parliament today.

The government has set aside Rs 10,000 crore this year for the scheme. Cleared by Parliament in the last session, the plan seeks to provide 100 days of assured employment to every rural household in 200 districts of the country.

The annual expenditure is estimated at Rs 40,000 crore-Rs 50,000 crore if the scheme is widened to 600 districts in five years. Economists say the government may be forced to scale up cost projections closer to reality.

The Centre is offering financial assistance to the scheme, which states will only have to implement. The least that would be paid to workers would be governed by the Minimum Wages Act, 1948 but the Centre would step in to ensure that the minimum is Rs 60 per day. The amount now varies from Rs 25 (Nagaland) to Rs 134 (Kerala).

The mid-year review said there was a need to provide for physical and social infrastructure and to “persevere with the revenue-led fiscal correction strategy”.

The silver lining has been the non-plan expenditure, which has been under control. “The government has been able to achieve reasonable success on the non-plan side.” Performance on non-debt receipts, revenue receipts and fiscal deficit fell short of the benchmarks in the fiscal responsibility act.

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