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Finance Minister, Chidambram likely to cut off GBS
(Feb 6, 2008)
This year, various Union ministries might have to witness major cut off in GBS, the Gross Budgetary Support, the money granted by finance ministry through Union Budget, than what they have demanded to carry out their plans in 2008-09. The Finance Ministry told the Planning Commission that it wont be able to grant more than Rs2.28 trillion.

The ministries however put forward a demand of Rs3.44 trillion under the so-called gross budgetary support, or GBS. The Planning Commission after analyzing every aspect decided that the GBS should be Rs2.50 trillion. In fact in 2007-08, the GBS was Rs2.05 trillion.

" This joint decision has been taken by both the finance ministry and the Planning Commission according to which it was decided that to cut down the fiscal deficit to 3% in 2008-09," as per the senior government official who wished to remain unidentified. He also told that lower assignation of money to these ministries in the upcoming Budget 2008-09 will help in materializing various planned schemes.

Under the suggested allocation of GBS through the finance ministry, agricultural sector has been decided to grant an surplus allocation of 12% (over last year's budget); health and family welfare 16%; whereas rural development, that consists of various Centrally sponsored plans, that also includes few Bharat Nirman projects and NREGS, only 9%. According to Pranab Sen, the chief statistician, since this is the year of FRBM, the finance ministry under pressure is striving hard to keep up the revenue deficit.