NEW DELHI: A figure-fudging exercise is on in the Finance Ministry to limit the fiscal deficit 106.5 percent of the gross domestic product (GDR) by the Finance Minister Dr Manmohan Singh for the budget for 1991-92.
According to sources in North Block despite the sharp decline in customs revenue and the unexpected technical credit to the erstwhile Soviet Union Dr Manmoham Singh will succeed in limiting fiscal deficit to the prescribed level. The Finance Minister has resorted to a novel method in accomplishing what was considered to be an extremely difficult task.
Inquiries reveal that the Finance Ministry has not released a large chunk of the budgeted amount including external aid to public sector undertakings. These undertakings are made to borrow from banks to finance their ongoing projects. In the case of new projects both the Public Investment Board (PIB) and the Cabinet Committee on economic affairs (CCEA) have been going slow in clearing them.
External aid both from bilateral and multilateral meant for specific projects stays with the government. The total annual allocation for public sector undertakings consists of internal resources budget support external aid and commercial borrowing. In the case of many undertakings the Finance Ministry did not release a major portion of the budgetary support and external aid. External ad first B0eS to the Reserve Bank which releases equivalent rupees which then go the government kitty. The worst-hit sectors are power petroleum and irrigation as work in the ongoing projects cannot be stopped the government has asked public sector undertakings to take overdraft from banks. They have to pay heavy interest for bank money but will not get any interest for the amount which remains with the government.
Article extracted from this publication >> February 21, 1992
