People's Democracy

‘Allocate Sufficient Funds For Eleventh Plan’

Karat & Bardhan Write To PM

Prakash Karat, general secretary of CPI(M) and A B Bardhan, general secretary of CPI have written a letter to the prime minister Dr Manmohan Singh on November 25, 2006 seeking allocation of sufficient funds in the Eleventh Five Year Plan for fulfilling the commitments made in the Common Minimum Programme. They have asked for increased Gross Budgetary Support for the Plan. 

The full text of the letter is given below:

THE Eleventh Five-year Plan, which is currently in the process of being formulated, gives a good opportunity for the UPA government to reaffirm its commitments made in the National Common Minimum Programme. In order to do justice to those commitments, Plan expenditure has to be increased substantially. 

There are at least six areas in which specific commitments have been made in the NCMP and the fulfillment of which require substantial fund allocation, which is yet to be made by the government. These include increasing public investment in agriculture, spending 6 per cent of GDP on education, spending 2-3 per cent of GDP on health, ensuring social security for workers in the unorganised sector, universalisation of the ICDS, providing a legal guarantee for at least 100 days of employment for at least one able-bodied person in every rural, urban poor and lower-middle class household and strengthening the public distribution system. The Gross Budgetary Support for the Tenth Plan has been around 7 per cent of GDP. A rough estimate suggest that the GBS for the Eleventh Plan has to be increased by at least another 4.75 per cent of GDP in order to meet the NCMP commitments (increase of 1 per cent of GDP on public investment in agriculture, 1 per cent of GDP on education, 1 per cent of GDP on health, 0.75 per cent of GDP on the employment guarantee, 0.5 per cent of GDP on social security for unorganised sector workers and 0.5 per cent for universalisation of the ICDS). In addition, increase of around 0.5 per cent of GDP in non-Plan expenditure is required to strengthen the PDS.

There is also the plight of the most deprived sections to be taken account of. Apart from the dalits and adivasis, the conditions of the Muslim community is most deplorable, whether it be access to education or employment. Many of them who are artisans are finding their livelihood destroyed. Special allocations will be required to address their problems.

While making an assessment of the two years of the UPA government earlier this year, the Left parties had expressed dissatisfaction over the lack of adequate fund allocation to fulfill the commitments made in the NCMP vis-à-vis people’s welfare. Besides enacting the NREGA and initiating it in 200 districts, no major initiative has been taken by the government in these areas even after completing half of its tenure.

It appears that the Planning Commission has proposed an increase in the Gross Budgetary Support for the Eleventh Plan by around 2.5 per cent of GDP only. This implies that either the NCMP mandated schemes would be underfunded or Plan expenditure on other items would be cut in order to fulfill the NCMP commitments, which is unwarranted. There does not seem to be any lack of domestic resources in order to enhance Plan expenditure to fulfill the NCMP commitments, provided the government has the political will to mobilise the same. According to an official note circulated in a recent meeting of the consultative committee attached to the ministry of finance, total tax exemptions/concessions granted in the year 2004-05 stood at Rs 1,76,073 crore (5.8 per cent of GDP) out of which corporate tax exemptions alone amounted to Rs 57,852 crore (1.9 per cent of GDP). Curbing such tax exemptions along with the implementation of other proposals for resource mobilisation made by the Left parties would help in the financing of enhanced Plan expenditure.

GBS for the Plan should be increased by at least 1 per cent of GDP from the very first year of the Eleventh Plan, i.e. from 2007-08 itself and increased by a similar amount in the subsequent years. The rigid targets set by the FRBM Act should not be allowed to come in the way of enhancing Plan expenditure and the suggestion regarding postponing the targets as made in the Draft Approach Paper should be considered seriously. Fulfilling the commitments made in the NCMP should be accorded topmost priority while deciding upon the GBS for the Eleventh Plan. (INN)