With the global economic downturn lingering, the government has cautiously set in motion the process of finalising provisions for the next Budget by asking Central ministries to ensure fiscal prudence in planning their resources, while also being inclusive and equitable. The Planning Commission has asked the ministries to submit their outlays for the Annual Plan 2010-11 by this week.

In a letter to the ministries, the panel pointed out that there was an express need to utilise resources in the “most judicious and efficient manner by prioritising plan schemes” and reminded them that it has been vigorously pursuing Zero-Based Budgeting exercise for weeding out or transfer of Centrally-sponsored schemes. The Commission’s decisions in this connection should be aptly reflected in their Annual Plan.

The panel also asked the ministries to ensure well-defined quarterly measurable and monitorable targets for improving the efficiency of budgetary allocations.

Reminding the ministries that there has been a steady increase in the outlays for Centrally-sponsored schemes and those for which additional Central assistance is given, the panel made it clear that states will have to make appropriate provision in their budgets and sectoral outlays as per their share of funding. It also asked the ministries to spell out the criteria and mode of calculation for allocation among the states.

Reminding the ministries and departments of Prime Minister Manmohan Singh’s initiative, the panel also asked them to earmark at least 10 per cent of their respective gross budgetary support (GBS) for the North-Eastern states and about 2-3 per cent of their budget for e-Governance and IT applications. In a move indicative of the GBS in the Budget 2010-11, the Commission asked the ministries to formulate their Annual Plan in three scenarios:

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