ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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State Finances: Higher Plan Allocation Not Enough

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At finance minister Yashwant Sinha's meeting with the deputy      chairman of the Planning Commission, the commission is reported to have urged that while the plan allocation for the states in the coming fiscal year should "in no case be less than last year", it should in fact be raised substantially. According to informed sources, the decision taken was apparently that the plan allocation to the states would be higher than last year, by as much as 15 per cent or more.

If the agreed increase in the budgetary plan allocation by 15 per cent or thereabouts is actually implemented by the union finance ministry, it will no doubt be welcomed by the state governments. But the states would perhaps first like to see what Yashwant Sinha's budget of the next fiscal year actually provides for the states by way of plan allocation, given the record of the centre in fulfilling its financial commitments to the states.

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