T.M. Thomas Isaac: The new pattern will be followed from next year.

THIRUVANANTHAPURAM: The Government proposes to change the traditional practice of budget preparation, involving primarily a listing of the financial proposals, to the newly advocated practice of `impact budget' preparation that will analyse the macro-economic implication of each financial proposal included in the Budget.

Stating this in the Assembly on Wednesday, Finance Minister T.M. Thomas Isaac said only such an approach to the Budget preparation exercise would help the Government put the resources in its command to the optimum benefit of the State and its people. The House needed to be informed about the cost of each proposal in the Budget and the larger logic of the sacrifices the Budget was constrained to make for want of resources. The new pattern of budget preparation would start next year, he said.

Dr. Isaac was replying to the discussion on supplementary demands for grants for various departments for the current financial year. The House passed supplementary demands for grants to the tune of Rs.481.43 crore.

He said the overall Budget deficit for the current year would go up from the originally projected sum of Rs.761 crore to Rs.881 crore as a result of the concessions and waivers announced in the Assembly during the passing of the Finance Bill.

Responding to a specific question from Congress MLA Aryadan Mohammed, the Minister said he did not visualise a situation where the Government would have to go in for a cut in Plan size this financial year due to resource constraints. However, this would also depend on whether the State could raise a loan of Rs.7,200 crore to finance the plan.

After curtailing the State's borrowing ceiling initially to a lower level, the Centre, following a strong representation from the State, had allowed it to borrow Rs.7,200 crore this year. However, the borrowing possible from the Small Savings Scheme was set to come down by around Rs.1,600 crore this year. While giving the nod to the State's request for restoring the borrowing ceiling to Rs.7,200 crore, as originally proposed by the Planning Commission, the Centre had imposed a condition that the shortfall in loan receipts from the Small Savings Scheme should not be made good through borrowings from other sources.

"We should strongly lobby to get our needs conceded by the Centre," the Minister added.

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