THIRUVANANTHAPURAM: The ongoing financial crisis in the state has resulted in a delay in finalising the annual plan outlay for the next fiscal year, along with a consideration of a 6-8% reduction from the current year’s outlay of Rs 38,629.19 crore.
This reduction is intended to make the annual plan more realistic, to minimise discrepancies between the projected and actual figures, sources said.
The annual plan presented in the state budget lists the programmes to be implemented by different departments, agencies and PSUs besides the plan assistance fund to local self-governments (LSGs). The gross annual plan outlay is the aggregate of funds under the state plan and receipts from centrally sponsored schemes (CSS) and the National Cooperative Development Corporation (NCDC).
The proposal to slash the gross plan outlay in the upcoming budget is in the wake of a shortage of funds under the state plan, it is learnt. The state plan is made up of funds drawn from various receipts, including tax revenue and market borrowings. Of the gross outlay in the 2023-24 budget, Rs 30,370 crore was under the state plan, and Rs 8,259.19 crore with CSS and NCDC combined. However, the government could mobilise only around Rs 23,000 crore under the state plan, against the projected Rs 30,370 crore.
“The proposed reduction is to make the annual plan more realistic. It will help avoid a gap between the projected outlay and the actual figure. A difference is undesirable because it would sabotage the priority of various projects. But a realistic plan will help in achieving financial prudence,” said a source.
The projected outlay for the current fiscal, Rs 38,629.19 crore, was below the previous year’s Rs 39,665.19 crore. This was due to the decline in central assistance from Rs 9,295 crore in 2022-23 to Rs 8,259 crore in 2023-24.
The upcoming budget will present the third annual plan under the 14th Five Year Plan, from 2022-27, formulated by the Kerala State Planning Board (SPB). The board prepares the annual plan in consultation with government departments and other stakeholders. It lists spending under 12 categories including agriculture, rural development, irrigation, energy and social services, transport, science and technology, and plan assistance to LSGs.
The plan document has to be approved by the SPB chaired by the chief minister before incorporating it in the budget. The 2024-25 budget is expected in late January next year.
The government may opt for a vote on account for the time being and the budget discussion will be held after the general election.