Core sector may see 35-60% hike in Central support

P Vaidyanathan Iyer

Finance Minister Yashwant Sinha is likely to effect a whopping 35-60 per cent increase in the Centre's budgetary support to the outlay for key infrastructure sectors including power, rural and urban roads, irrigation and the railways in the forthcoming Budget.

Top government officials told Business Standard, given the economic slowdown, it was imperative for the Centre to provide substantial support to the vital areas of power, irrigation and roads which will be instrumental in spurring the consumption demand in the rural segment.

From Rs 245 billion allocated in 2001-02 for these areas, Sinha might well increase the support to about Rs 350 billion in the next fiscal, they added.

Officials argued the increased budgetary support is largely to compensate for the poor internal and extra-budgetary resources contribution to the total Plan.

The IEBR for the Central Plan has been pared to Rs 470 billion or just 28 per cent of the total Plan size of Rs 1,680 billion for 2002-03. In 2001-02, IEBR accounted for almost 41.35 per cent to the total Central Plan outlay of Rs 1,710 billion.

According to sources, the Centre's budgetary support to the power sector would be about Rs 65 billion in the next fiscal, which represents a big jump of almost 50 per cent when compared to Rs 43.28 billion in the current financial year.

Sinha is likely to continue with his emphasis on reforming the distribution sector with an increased allocation to the Accelerated Power Development Programme from the present Rs 15 billion to about Rs 35 billion in the next fiscal.

This is aimed at restructuring the state electricity boards. The budgetary support would also fund some atomic energy projects, sources said.

For the Railways, the Centre has decided to allocate about Rs 53 billion for 2002-03, up over 35 per cent compared to Rs 38.40 billion in the current fiscal. The enhanced allocation would be primarily to fund pending projects and the Centre's support for the Special Railway Safety Fund.

The government is also likely to commit significant resources towards the National Highway Development Programme in the next fiscal too. From Rs 51.27 billion allocated for 2001-02, the budgetary support is likely to be more than Rs 82 billion, representing an increase of over 60 per cent.

The increased resources would go towards funding the second phase of the 13,000 km NHDP project which involves multi-laning and upgradation of about 7,300 km of national highways connecting Kashmir to Kanyakumari and Silchar to Porbandar.

To give a boost to the agriculture sector -- agri-reforms being a focus area in the forthcoming Budget -- the finance ministry is also hiking the allocation for the Accelerated Irrigation Benefit Programme from the present Rs 20 billion to about Rs 30 billion for 2002-03. The stress would, however, be on completing the pending irrigation projects in the states.

Rural development, including roads, would also see a modest hike in budgetary support in the next fiscal. The over Rs 110 billion commitment for the next fiscal (Rs 92.05 billion in the current year) would include about Rs 25 billion for the Prime Minister's Gram Sadak Yojana and Rs 50 billion for the Sampoorna Grameen Rozgar Yojana.

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