Funds crunch may hit PM’s pet schemes

In what could be a major setback to the government’s plans of making the forthcoming Union Budget social sector-centric, quite a few Central ministries are facing budgetary constraints which is seriously affecting the implementation of various flagship programmes of the NDA regime.

Sources aware of the development told this newspaper that though the government has a lot of ambitious schemes, like “Clean Ganga” and “Swachchh Bharat Abhiyan”, due to lack of budgetary support, ministries and departments engaged with implementing such initiatives are facing a shortage of funds.

With the current financial year nearing its end, the revised budgetary support — which is normally given to all ministries during the course of the fiscal as the actual budgetary estimates always fall short — has not been received by some key departments in totality, sources informed.

Official sources said that the government’s failure to achieve the ambitious Rs 69,500-crore disinvestment target (sale of government stake in public sector companies to raise funds) for 2015-16 and the 14th Finance Commission’s key recommendation of increasing by 10 per cent the share of states in Central taxes, to 42 per cent, have been the two key reasons behind the lack of funds with the Centre. Till date the government has managed to garner only Rs 12,700 crore through its stake sale in public sector companies, which is woefully short of the total annual disinvestment target of Rs 69,500 crore.

Secondly, several states, especially the north-eastern ones, have indicated their helplessness in shouldering the increased burden of Central taxes, saying that owing to their geography and other socio-economic reasons, they don’t have the financial wherewithal to do so.

Moreover, the government is also mindful of keeping its fiscal deficit (difference between income and expenditure) in control during this time of the year, and, therefore, despite repeated requests to the finance ministry, various departments are yet to receive their share of funds for implementing key schemes related to their sectors.

Also, in the forthcoming fiscal, the government will have to bear the financial brunt of implementing the one-rank-one-pension (OROP) scheme and also the recommendations of the Seventh Pay Commission, both of which will have heavy financial implications on it.

At the same time, with Prime Minister Narendra Modi having announced some more ambitious schemes like Skill India and Start Up-Stand Up India, the finance minister will have to be at his skilful best to ensure that the government has enough funds to fulfil all these initiatives when he rises to present the Union Budget at the end of this month.