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Monday, Feb 15, 2010
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Planning Commission for cut in outlay for Power Ministry

Special Correspondent

NEW DELHI: Worried by the concerns of a huge fiscal deficit and the under-performance of the power sector, the Planning Commission is understood to have recommended slashing the budget outlay of the Power Ministry by over 25 per cent to Rs. 10,630 crore for the next fiscal against the Ministry’s demand of Rs. 14,430.50 crore.

Officials in the Power Ministry said the Planning Commission has despatched a letter informing it of the recommendation.

The allocation of Rs. 10,630 crore recommended would be the gross budgetary support (GBS) for the Ministry during 2010-11.

The Planning Commission as well as the Prime Minister’s Office have expressed concern in recent months over the poor performance of the power sector which could hamper economic growth.

Although officials attribute the Plan panel’s recommendation in tune with the need to bring down the fiscal deficit in 2010-11 to 5.5 per cent of the Gross Domestic Product from the projected 6.8 per cent this fiscal, it wants more and more public-private participation in power projects to take off.

The demand from the Ministry was itself slightly less than that sought by power PSUs such as the National Thermal Power Corporation (NTPC), the National Hydro Power Corporation (NHPC), the Power Grid Corporation of India Limited (PGCIL) and the Power Finance Corporation (PFC). They had asked for a GBS of Rs. 14,469.42 crore and an Internal and Extra Budgetary Resource (IEBR) of Rs. 50,121.42 crore for 2010-11. The exact GBS and IEBR would be decided by the Finance Ministry in the budget, to be presented in Parliament on February 26. The planned amount would be given to the Ministry of Power, which would disseminate it among the PSUs. The Power Ministry has targeted a plan expenditure of Rs. 30,451 crore during 2007-12.

With Rs. 10,630 crore of GBS, the Power Ministry would be exhausting in the first four years almost all its targeted expenditure for the entire five year plan. This implied that the Power Ministry would be overshooting the targeted plan expenditure.

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