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FINANCING THE 12FINANCING THE 12FINANCING THE 12FINANCING THE 12THTHTHTH FIVE YEAR PLAN FIVE YEAR PLAN FIVE YEAR PLAN FIVE YEAR PLAN
(2012 (2012 (2012 (2012 –––– 17)17)17)17)
Resources of the Centre for 11th Plan
�Resources Projected for the 11th Plan (at 2006-07 prices):
oGBS `1421711 crore
oCentral Assistance to States/UTs ̀ 324851 crore
oResources of CPSEs `1059711 crore
oCentral Plan Outlay `2156571
�Financing of the 11th Plan-Centre :
(A) GBS to Central Plan (`1096860 crore)
oBCR 46%
oBorrowing 54%
(B) IEBR of `1059711 crore
during the 11 Plan (2007-12) (` crore at 2006-07 prices)
Financial Projection & Realization: Centre during the 11th Plan (2007-12) (` crore at 2006-07 prices)
Sources of Funding Projection Realization % Achievement
BCR 653989 -177679 -27.17
Borrowings including net MCR 767722 1381639 179.97
Net Flow from abroad 0 64563
GBS for Plan 1421711 1268523 89.23
CA to States/UTs’ Plan 324851 338913 104.33
GBS for Central Plan 1096860 929610 84.75
Resources of PSEs 1059711 684272 64.57
Central Plan Outlay 2156571 1613882 74.84
Achievement of the 11th plan - Centre: Realization vis-à-vis Projection (` crore at 2006-07 prices)
Achievement of the 11th plan - Centre: Realization vis-à-vis Projection (` crore at 2006-07 prices)
653989
767722
0
1421711
324851
1096860
1059711
2156571
-177679
1381639
64563
1268523
338913
929610
684272
1613882
BCR
Borrowings including net MCR*
Net Flow from abroad
GBS for Plan
CA to States/UTs’ Plan
GBS for Central Plan
Resources of PSEs
Central Plan Outlay
11th Plan Realization
Realization Projection
Achievement in the 11th Plan - Centre
(Revenue receipt in the 11th Plan)
�As a percent of GDP revenue receipt, GTR, Net TR & NTR
declined significantly between 2007-08 & 2011-12.
o Revenue receipt declined by 2.2 percent point from 10.87% in
2007-08 to 8.66% in 2011-12.
o GTR declined by about 1.71 percent point.
o Net-TR declined by 1.56 percent point from 8.81% in 2007-08
to 7.25% in 2011-12.
o NTR declined by 0.6 percent point from 2.05% in 2007-08 to
1.41% in 2011-12.
�Reasons for decline in NTR: (i) debt-consolidation and
resetting of interest rate and (ii) disintermediation of the
Centre in borrowing.
Achievement in the 11th Plan - Centre
� Non-plan Revenue Expenditure (NPRE)
increased by 0.77 percent point of GDP from
8.44% in 2007-08 to 9.21% in 2011-12 due to
o Increase in Salary due to 6th pay commission
o Increase in Subsidy expenditure
o Fiscal concession and stimulus package
�Shortfall in aggregate non-debt resources and
increase in NPRE led to Negative BCR
�As a result, Borrowing including net MCR was 109% of
the GBS for 11th Plan.
Resources of the States/UTs for 11th Plan
�Resources Projected for the 11th Plan (at 2006-07 prices):
o State’s Own Resources `1163296 crore
oResources of SPSEs `128824 crore (included in SOR)
oCentral Assistance to States/UTs ̀ 324851 crore
oAggregate Plan resources `1488147 crore
�Financing of the 11th Plan-States/UTs:
oBCR 25.87%
oBorrowing 43.64%
oCentral assistance 21.83%
o SPSE 8.66%
Achievement in the 11th Plan – States/UTs
� Achievement of the States/UTs by 90.57%
� BCR realized by 71.26%
� IEBR of SPSEs exceeded the target by 4.2%
� Borrowing restricted to 92.44%
� State’s Own tax revenue increased due to Tax reforms such as
VAT
� Share in Central Tax improved due to enhanced share
recommended by 13th FC
� Non-plan expenditure was higher than projected due to impact
of 6th Play commission
Financial Projection & Realization: States/UTs during the 11th Plan (2007-12) (` crore at 2006-07 prices)
Sources of Funding Projection Realization % Achievement
Balance from current revenues 385050 274400 71.26
Resources of PSEs 128824 134234 104.2
Borrowings including net MCR 649422 600295 92.44
State’s own resources 1163296 1008929 86.73
CA to States’ and UTs’ Plan 324851 338913 104.33
Aggregate plan resources 1488147 1347842 90.57
GBS to Plan 1359323 1213608 89.28
Achievement of the 11th plan - States/UTs: Realization vis-à-vis Projection (` crore at 2006-07 prices)
385050
128824
649422
1163296
324851
1488147
1359323
274400
134234
600295
1008929
338913
1347842
1213608
Balance from current revenues
Resources of PSEs
Borrowings including net MCR
State’s own resources
CA to States’ and UTs’ Plan
Aggregate plan resources
GBS to Plan
11th Plan Realization
Realisation Projection
Challenges for Financing the 12th Plan
Sustaining high economic growth is crucial for
�Sustaining high economic growth is crucial for revenue buoyancy
o The economy to recover from recent slowdown
o The economic growth declined from 9.3% in 2007-08 to 6.2% in 2011-12.
�Fiscal deficit has increased continuously during the 11th Plan period.
o Fiscal deficit of the Centre, as a per cent of GDP, increased from 2.54 per cent in 2007–08 to 5.89 per cent in 2011–12 (RE).
o Fiscal deficit of the States remained around 3% of GDP
o Combined fiscal deficit (Centre and States) increased from 3.97 per cent in 2007–08 to 8.09 per cent in 2011–12 (RE).
o Fiscal deficit of the Centre projected to decline to 3% of GDP by 2016-17 and combined deficit to within 6% of GDP.
Fiscal deficit as per cent to GDP during the
11th Plan
2.54
5.99
6.48
4.87
5.89
1.49
2.26
3.02
2.15 2.21
3.97
8.17
9.46
6.99
8.09
0
1
2
3
4
5
6
7
8
9
10
2007–08 2008–09 2009–10 2010–11 2011–12 (RE)
Centre States Combined
Challenges for Financing the 12th Plan
� Non-Plan expenditure has also been increasing steadily as � Non-Plan expenditure has also been increasing steadily as percent of GDP
o The increase in pension and salary has been due to 6th pay
Commission award.
o There is an urgent need to rationalize the subsidy through necessary reforms to release resources for plan expenditure.
NPRE and its components (as percent of GDP)
Items 2007–08 2011–12 RE
Interest 3.43 3.11
Pension 0.49 0.63
Salary 0.89 1.13
Subsidies 1.42 2.44
Other NPRE 2.21 1.9
(Total) NPRE 8.44 9.21
Challenges for Financing the 12th Plan
�Resources for Plan being residual must come either
from increased resource mobilization or reduction in
non-plan expenditure.
�With FD target declining, the availability of debt
resources will also get reduced.
�So, for making the required resources available, we
need to have higher economic growth for good tax
buoyancy, containment of non-plan expenditure
including subsidies and adequate IEBR.
Public Sector resources for 12th Plan - Centre
�The resource projection for the 12th plan assumes the
following:
oAverage economic growth of 14.8% per annum.
oFiscal deficit to decline from 5.1% of GDP in
2012-13 to 3.0% in 2016-17.
oNet Tax revenue to increase from 7.6% of GDP in
2012-13 to 8.79% in 2016-17.
oSubsidies to decline from 2.44% of GDP in 2011-
12 (RE) to 1.5% in 2016-17.
(at current prices)
Public Sector resources for 12th Plan – Centre
(at current prices)
� GBS: `3568626 crore.
� CA to the States’ and UTs’ Plan: `857786 crore.
� IEBR of Central public sector enterprises (CPSEs): `1622899
crore.
� Central Plan outlay: `4333739 crore.
12th Plan resources of the Centre (at current prices) (` crore)
Sources of Funding Projection
BCR 1387371
Borrowings including net MCR 2181255
GBS to Plan 3568626
CA to States and UTs’ Plan 857786
GBS for Central Plan 2710840
Resources of PSEs including Borrowed Resource 1622899
Total Resources for Central Plan 4333739
Public Sector resources for 12th Plan – States/UTs (at current prices)
Public Sector resources for 12th Plan – States/UTs (at current prices)
� The Aggregate Plan resources: `3716385 crore
� States/UT’s own resources: `2858599 crore
� Central Assistance: `857786 crore
12th Plan resources of States/UTs (at current prices) (` crore)
Sources of Funding State UTs Total
Balance from Current Revenues 885939 74040 959979
Resources of PSEs 376043 4276 380319
Borrowings 1494258 24043 1518301
State’s Own Resources 2756240 102359 2858599
CA to States’ and UTs’ Plan 816083 41703 857786
Aggregate Plan Resources 3572323 144062 3716385
Overall Financing Pattern
Overall Financing Pattern: 11th and 12th plan (at current prices) (` crore)
Sources of Funding Eleventh Plan Realization Twelfth Plan Projection
Centre States/UTs Total Centre States/UTs Total
Balance from Current Revenues –242390 381536 139146 1387371 959979 2347350
(–11.97) (22.11) (3.71) (32.01) (25.83) (29.16)
Borrowings including net MCR 1751691 752815 2504506 2181255 1518301 3699556
(86.50) (43.62) (66.77) (50.33) (40.85) (45.96)
Net Inflow from Abroad 80043 0.00 80043 – – –
(3.95) – (2.13) – – –
Centre’s GBS 1589344 – 1589344 3568626 – 3568626
(78.48) – (42.37) (82.35) – (44.33)
Resources of PSEs/Local Bodies 857244 170039 1027283 1622899 380319 2003218
(42.33) (9.85) (27.39) (37.45) (10.23) (24.88)
State’s Own Resources – 1304390 1304390 – 2858599 2858599
– (75.58) (34.77) – (76.92) (35.51)
CA to States and UTs’ Plan –421458 421458 – –857786 857786 –
(–20.81) (24.42) – (–19.79) (23.08) –
Resources of Public Sector Plan 2025130 1725848 3750978 4333739 3716385 8050123
Note: figures in parentheses are percentages of Resources of Public Sector Plan
(`
CA to
States/UTs’
Plan
27%
GBS for
Central Plan
73%
GBS distribution between Central
and State Plan: 11th plan
Gross Budgetary Support 3568626
CA to States/UTs’ Plan 857786
GBS for Central Plan 2710840
Gross Budgetary Support 1589344
CA to States/UTs’ Plan 421458
GBS for Central Plan 1167886
CA to
States/UTs’
Plan
24%
GBS for
Central
Plan
76%
GBS distribution between Central
and State Plan: 12th plan
Sectoral allocation of GBS
� The GBS allocation of the Centre to major sectors has been made in tune with the
approach adopted for the Twelfth Plan for ‘faster, sustainable and inclusive
growth’.
� Twelfth Plan focuses on poverty reduction, ensuring access to basic physical
infrastructure, health and education facilities to all.
� Biggest increase in allocation of Centre’s GBS is provided for Health and Child
Development, Urban Development and Education.
Allocation of Centre’s GBS by Major Sectors (at current prices) (` crore)
Major Sectors 11th Plan
Realization
12th Plan
Projection
% Increase over
11th Plan
Agriculture and Water Resources 116554 284030 143.69
Rural Development and Panchayati Raj 397524 673034 69.31
Scientific Departments 58690 142167 142.23
Transport and Energy 204076 448736 119.89
Education 177538 453728 155.57
Health and Child Development 112646 408521 262.66
Urban Development 63465 164078 158.53
Others 458849 994333 116.7
Total Plan Allocation 1589342 3568626 124.53
Sectoral allocation of Central Plan Outlay
Agriculture&
Allied Activities
3%
Rural
Development
9%
Special Area
Programmes
0%
Irrigation &
Flood
Control
0%
Energy
25%
Industry&
Minerals
7% Transport
20%
Communication
s
3% Science,Technol
ogy &
Environment
3%
Economic
Services
2%
Social Services
27%
General
Services
1%
11th Plan Agriculture&
Allied
Activities
3% Rural
Development
6%
Special Area
Programmes
0%
Irrigation &
Flood Control
0%
Energy
25%
Industry&
Minerals
7%
Transport
19%
Communicatio
ns
2%
Science,Techn
ology &
Environment
3%
Economic
Services
4%
Social Services
30%
General
Services
1%
12th Plan
Sectoral allocation of States/UTs Plan
Agriculture&
Allied Activities
6%
Rural
Development
6%
Special Area
Programmes
3%
Irrigation &
Flood Control
14%
Energy
11%
Industry&
Minerals
2%
Transport
12%
Communicatio
ns
0%
Science,Techn
ology &
Environment
1%
Economic
Services
3%
Social Services
39%
General
Services
3%
11th Plan
Agriculture&
Allied Activities
7%
Rural
Development
6%
Special Area
Programmes
2%
Irrigation &
Flood Control
12%
Energy
11%
Industry&
Minerals
2%
Transport
11%
Com
munic
ations
0%
Science,Techn
ology &
Environment
1%
Economic
Services
4%
Social Services
42%
General
Services
2%
12th Plan
Sectoral allocation of 12th Plan (Centre & States)
Agriculture &
Allied Activities
4% Rural
Development
8%
Special Area
Programmes
1%
Irrigation &
Flood Control
6%
Energy
19%
Industry&
Minerals
5%
Transport
17%
Communicatio
ns
2%
Science,Techn
ology &
Environment
2%
Economic
Services
2%
Social Services
33%
General
Services
1%
11th Plan
Agriculture
& Allied
Activities
5%
Rural
Development
6%
Special Area
Programmes
1% Irrigation &
Flood Control
5%
Energy
19%
Industry&
Minerals
5%
Transport
16%
Communicatio
ns
1%
Science,Techn
ology &
Environment
2%
Economic
Services
4%
Social Services
35%
General
Services
1%
12th Plan