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FinMin wants proper use of capital funds
September, 18th 2006
Suggesting corrections in budgetary trends to reverse the influence of revenue expenditures at both the Central and state levels, the finance ministry has asked the Planning Commission to ensure that grants given for the creation of capital assets lead to an increase in capital stock. In its comments to the approach paper to the 11th Plan, the ministry has emphasised that the Planning Commission should go in for zero-based budgeting. It also sought to ensure that the outlays were effectively translated into results. Aspects of review of allocations and linking them to outcomes required considerable efforts from the Planning Commission, the ministry added. It advised the Plan panel to reduce over-dependence on petroleum. The next five-year Plan must focus on promoting alternative sources of energy. The contribution of wind energy must be increased to 13,400 Mw by the end of the 11th Plan from 5,300 Mw at the end of the 10th Plan. The finance ministry also sought the implementation of the hydrogen energy road map during the 11th Plan, with the government planning to put a million hydrogen powered vehicles on the road by 2020. The issue of coal pricing and marketing will probably get more importance in the 11th Plan. The coal market must become competitive with privatisation of coal mines after amendments in the Coal Mines (Nationalisation) Act, 1973, free imports and exports and greater allocation of existing blocks for captive purposes. In order to attain success through private-public partnership in the road sector, the 11th Plan must address issues such as sharing of risks and contract management and development of the construction industry must be addressed in the 11th Plan, the finance ministry added. The Commission should also review reform-linked programmes such as the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the Accelerated Irrigation Benefit Programme (AIBP) and Accelerated Power Reforms Development Programme (APRDP), and provide greater incentives for reform linkages during the 11th Plan. The reason for the organisational failure of Krishi Vigyan Kendras in accelerating agricultural growth must be given space.
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