Financial Daily from THE HINDU group of publications
Friday, Nov 26, 2004
Industry & Economy
Plan panel to begin talks with States from Nov 30
New Delhi , Nov. 25
THE Planning Commission is kicking off State Plan discussions for 2005-06 starting with Tamil Nadu on November 30 here, even as the current fiscal year Plan discussions with State Government saw an interlude because of the General Elections in May 2004.
Sources in the Yojana Bhawan here told Business Line that unlike the past when the State Plan discussions were plodding on even when the State Governments had presented their Budgets to the Assembly, the United Progressive Alliance (UPA) Government wants the State Plan discussions for the next fiscal to be completed in entirety before these States present their budgets for next fiscal from February to March 2005.
That is why, beginning with Tamil Nadu on Tuesday next week, the Plan panel has lined up meeting with all the State Chief Ministers and also Union Territories for discussing Central Plan support to the States for 2005-06 to be wound up by February 2005 at the earliest.
The purpose of the new course is to render the Plan process more meaningful by finalising the Annual Plans of States before the presentation of their Budgets so that Plan priorities are properly reflected in them, the sources said.
In a recent communication to the State Chief Ministers across the country, the Deputy Chairman of the Planning Commission, Dr Montek Singh Ahluwalia, told them that in order to accelerate decisions concerning the Annual Plan 2005-06, "we will have to discuss the matter before the Gross Budgetary Support (GBS) has been announced by making assumptions based on trends".
The sources said the States have been urged to begin preparation of the draft State Annual Plan 2005-06, based on an expected increase of 18 per cent in the Central support extended to States in 2003-04.
This would in effect be the core plan, based on conservative resource estimates wherein financing of investments proposed could be largely protected.
Where actual provisions in 2005-06 (Budget estimates) for Central Assistance to State Plans "being more than 18 per cent higher than BE 2003-04, an additional allocation will be made to States as per the extant formula/arrangement", the sources noted adding that this allocation could subsequently be dovetailed into the States' revised outlay for Annual Plan 2005-06.
Dr Ahluwalia would flag off one-to-one interaction with State Chief Ministers beginning with the Tamil Nadu Chief Minister, Ms J. Jayalalithaa, on November 30, to be followed by Tripura and Jharkhand Chief Ministers on December 1, here.
The sources said proposals are afloat to depart from the past practices when the finalisation and issue of the sectoral outlays was a marathon process completed well after the State Plan was finalised at the Deputy Chairman-Chief Minister level, which sometimes took several months.
It is now proposed to cut these delays substantially by holding a two-day meeting with State Governments for finalisation of annual plan 2005-06. One the first day, in the forenoon session, preliminary discussions would be held at the official level on financial resources, followed, in the afternoon, by discussions with the Chief Minister to arrive at an agreement on priorities and to determine the size of the Plan.
On the second day, Working Group discussions would be held by the Member/State Plan Adviser concerned with the Chief Secretary and State Government officials to fix the sectoral outlays.
It is further revealed that the onus would be on the Plan panel to issue the Scheme of Financing and Approved Sectoral Outlays within 10 days of the second meeting.
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