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Impact of Modi's absence from Gujarat: Annual plan spending shows deceleration compared to last year

By Our Representative
Making an all-out effort to win the 2014 Lok Sabha polls by campaigning all over India, Gujarat chief minister Narendra Modi’s long absence from the state is starting to take a heavy toll on the expenditure on social sector. This is reflected in the spending on annual plan, the funds mainly meant for developmental works, on health, education, social justice and empowerment. Latest figures from the state’s finance department suggest there is a considerable slowdown in the expenditure incurred on the annual plan over the first last six months of this financial year. The spending was Rs 17,217.81 crore in the six months till 2012-13, while in 2013-14 it was Rs 15,738.06 crore.
Significantly, the shortfall in spending has come about despite the fact that Modi personally took special interest in raising the annual plan size, fixed at Rs 58,500 crore in February 2013, to Rs 59,000 crore. In fact, the state government made a big show soon after Modi’s meeting with Planning Commission vice-chairman Montek Singh Ahluwalia in June 2013, declaring that he had “convinced” the Planning Commission to increase the annual plan amount by 16 per cent. Even then, aAs the table below suggests, the slowdown compared to last year’s the annual plan spending began in June 2013, when the accumulated spending for this financial year was Rs 11,412.99 crore, as against Rs 11,936.79 crore last year.
Of the Rs 59,000 crore, the expenditure for the first six months – between April and September – of Rs 17,217.81 crore, comes to 26.67 per cent of the plan size for 2013-14. This is against the spending of Rs 15,738.06 crore, or 33.75 per cent of the annual plan size of Rs 51,000 crore in the previous financial year, 2012-13. “There is nothing new this year”, a senior official explained, adding, “Every year, anywhere between 10 and 20 per cent of the funds allocated for annual plan remain unutilized, and are ‘parked’ in public sector undertakings attached with respective government departments to be spent some time later, when schemes are made. This year the situation may be worse.”
Of the Rs 59,000 crore annual plan, if the finance department sources are to be believed, the actual “budgetary allocation” for the whole of 2013-14, is to the tune of Rs 48,364.79 crore, while rest of the amount, more than Rs 10,000 crore, is what is called “non-budgetary allocation” to the annual plan. Against this backdrop, the actual plan expenditure for the first six months of the current financial year comes to 32.54 per cent. As for the previous financial year, out of the “budgetary allocation” of Rs 41,325.73 crore, the actual spending was quite high -- 41.66 per cent.
 Annual plan month-wise accumulated spending (Rs crore)
2013-14
2012-13
APRIL  
2276.68
1573.58
 MAY  
5098.3
5165.11
 JUNE  
8067.59
7543.33
 JULY  
11412.99
11936.79
 AUGUST  
13440.01
14890.72
SEPTEMBER 
15738.06
17217.81

 Interestingly, the fall in annual plan spending in the first six months of this year has taken place when there is very little deceleration in the non-plan – or non-developmental – expenditure, in which “fixed” spending ranging from salary to government staff, maintenance of the government assets and payment of debts are included. Thus, while in the last financial year, the total non-plan expenditure was 44.36 per cent of the total non-plan budget, this year (2013-14), it was 42.49 per cent, which in value terms is Rs 24,691.33 crore out of the total allocation of Rs 58,104.55 crore.

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