Objectives and Orientation || Development Perspective || Macro Economic Dimensions || Policy Framework || Financing the Plan || Employment Perspective

MACRO-ECONOMIC DIMENSIONS

Public Sector Outlays by Heads of Development

3.5.1 Allocations of investment by sectors of economic activities like agriculture, industry, transport, etc., are related to output targets in these activities. The public sector plan in these activities is implemented through programmes and projects which are administered by Departments of Central or a State Government and are provided for in the budget under various developmental heads. And hence, for implementa-lional purposes allocations need also to he shown hy 'heads of development'. These allocations are done fur the total of public sector outlay which includes investment as well as the component of the current outlay.

Table 3.16 Sectoral Value Added and Employment Growth During Eighth Plan (1992-97)
(Percent)

3.5.2 In making these allocations high priority has been given to the programmes which enable the creation of "human capital". The programmes aimed at improving the income generating capability of the weaker sections and assuring adequate availability of food and wage goods also merit a higher share in the developmental expenditure of the Government. The emphasis on agriculture, rural development, special area programmes and irrigation follows from this strategy. Due care has also been taken to provide adequately as far as possible in the face of resource constraints, for the infrastructure sector, i.e., energy, basic industries, transport (rail, sea and air), and telecommunications, after allowing for the possibilities of private sector participation in these sectors. The allocation of outlays are presented in table 3.17. The table also gives an estimate of States/UTs-wise outlays and estimated budgetary support and internal and extra-budgetary resources for the Central Plan. Table 3.18 gives the details of outlays at the level of sub-heads of development.

3.5.3 The distribution of public sector outlay between Centre and States is determined hy the respective resource generation capabilities, on the one hand, and the distribution of the developmental responsibilities between the Centre and the States, on the other. As already mentioned, the States' own resources (Rs. 101485 crores) will he augmented hy making available Central Assistance for their Plan at a level of Rs.78,500 crores. In some of the developmental heads and programmes, such as, family welfare, eradication of disease/epidemics, reduction of illiteracy, poverty alleviation, etc., the Centrally sponsored schemes may continue. However, the number of such schemes will have to be reduced to the minimum essential. In some sectors such as power, roads/highways, large industries, village and small industries and science and technology, the investments made through the Central Plan over the past 10 to 15 years have been significant, giving adequate leverage to the Centre for influencing the outcomes in these sectors. Further expansion of the Centre's role will be at the expense of the initiatives expected from the States and local authorities. Table 3.20 gives details on State/Union Territory-wise and development head-wise outlays.

Table 3.17 Public Sector Outlay by Major Heads of Development - Eighth Plan (1992-97) :
Centre, States and Union Territories
(Rs. Crores at 1991-92 prices)

* - Includes allocations for Inegrated Rural Energy Planning Programme.
$ Includes Irrigation and Flood Control.
# Includes allocations for Forestry and Wildlife.

3.5.4 The Central Sector bears a residual responsibility for the plan objectives to the extent that these could not be realised through the State Plans or through private sector initiatives. At the same time it needs to be admitted that the traditional accounting and supervision mechanisms for keeping watch on public sector spending have not been fully effective. A more purposive identification of beneficiaries and fo-cussed targetting in respect of public sector expenditure is essential if the Government has to perform its role in the face of severe resource shortages. Programmes need to be evaluated by organisations other than those who administer them. Programme Evaluation Organisation in the Planning Commission, National Sample Survey Organisation and well reputed reseach institutions will have to be constantly involved with the task of evaluation of programmes and performance.

3.5.5 Departmentwise allocations of outlays in the Central Sector and their financing through budgetary support and through internal and extra budgetary resources are indicated in table 3.19. As a rule, the budgetary support for infrastructures will be confined to i) making provision for external aid for creation of new assets; and (ii) realising longer term objectives in areas which the market would not be able to take care of (i.e., hydel power, rail transport, infrastructure for the undeveloped hinterlands, etc.).

3.5.6 The internal resources of public enterprises will be made available for capital expenditure after considering i) possible increases in prices of their services and products; ii) a reasonable return to the Government on equity (valued at market prices); and iii) repayment of loans to the Centre. Interest on Government loans to enterprises will he reckoned at rates not less than the borrowing rate of the Government at the margin.

3.5.7 Allocation of extra budgetary resources (EBR) to departments is indicative at this stage, and will be reviewed keeping in view the performance measured at the capital market.

3.5.7.1 Outlays as envisaged here cannot anticipate the actual requirements of certain projects, still to be finalised in sectors such as steel and telecommunication. To the extent, the concerned ministries can finance the requirements of projects such as the modernisation of IISCO or Rourkela Steel Plant from out of their own internally generated resources, the corresponding outlays for these sectors may have to be marginally raised, after considering the savings in expenditure on other schemes, in the sector, and materialisation of benefits therefrom.

3.5.7.2 To realise the plan objectives of employment generation, universalisation of elementary education, removal of illiteracy, increasing agricultural output in the eastern region, larger output and employment in livestock/milch cattle based activities, providing substitute domestic fuels for fuel wood and kerosene in rural areas, the budget support for the Departments of Rural Development, Education, Agriculture and Cooperation, Agricultural Research and Education, Animal Husbandry and Non-Conventional Energy Sources has been raised sharply in comparison to the present annual expenditure of the respective departments. The actual allocation in the Annual Plans will be subject to

i) utilisation of plan expenditure for creation of productive assets rather than on office staff, administrative expenditure, office buildings and equipment etc.;

ii) evaluation of the benefits of ongoing programmes and the new programmes by an independent agency other than the implementing department, such as the Program Evaluation Organisation, National Sample Survey Organisation or other organisations specified by the Planning Commission; and

iii) revenue earnings from the assets created being maximised and credited to the implementing agency so as to bring about a reasonable parity between costs and benefits during the plan period.

Table 3.18  Public Sector Outlay by Heads of Development-Eighth Plan (1992-97)
(Rs. crores at 1991-92 prices)

* Figures may not add-up to total Schematic details pertaining to one State are awaited.
$ Where rules at present do not permit creation of internal resources outside the Consolidated Fund of India, IEBR has been shown in anticipation of evolution of appropriate mechanism to create such resources.

Table 3.19 Central Sector Outlays For The Eighth Plan (1992-97)
(Rs. Crores)

 Table 3.20 State/Union Territory-wise and Broad Sector-wise outlay for the Eighth Plan 1992-97
(Rs.Crores at 1991-92 Prices)