Planning Commission is understood to have apprised Prime Minister Atal Bihari Vajpayee about the adverse impact that the reduction in budgetary support in the coming fiscal will have on the economy.
Official sources said commission deputy chairman K C Pant has in a written communication to prime minister informed him about the adverse impact of the cut in gross budgetary support in 2003-04 on the social sectors, particularly education, drinking water and employment.
The finance ministry had recently communicated to the commission that the GBS for the next fiscal was proposed to be finalised at Rs 1,17,500 crore (Rs 1175 billion) as against the Rs 1,34,000 crore (Rs 1340 billion) sought by the commission.
With a GBS of Rs 1,13,500 crore (Rs 1135 billion) in the current fiscal, the Rs 1,17,500 crore (Rs 1175 billion) figure effectively means that the GBS remains frozen at last year's level if one discounts the 3.5-4 per cent inflation.
Pant is understood to have drawn particular reference to the impact of a reduced GBS on unemployment which is expected to grow substantially during the current five year plan period.
The projects which would be most severely hit would include the National Highways Development Project, the railway sector in particular, the Metropolitan Urban Transport Project in Mumbai or the Golden Quadrilateral upgradation, the village electrification programme and the family welfare programme.
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