New Delhi, Sept 2 : Urging reforms in the management of public finance, a high-level panel headed by the Prime Minister's chief economic adviser, Dr C. Rangarajan, has suggested the government should abolish the “age-old distinction between plan and non-plan expenditure” and said the job of preparing and finalising the annual budgets of the Centre and states should be assigned to the finance ministry, reports Asian Age.
This has far-reaching ramifications: if accepted, this will render the Planning Commission a sterile body.The commission, which now determines the gross budgetary support for Plan expenditure every year in consultation with the finance ministry, and then fixes allocations to each state, will be left only to prepare the plan document every five years.
The report, released here on Wednesday in the presence of Planning Commission deputy chairman Montek Singh Ahluwalia and Dr Rangarajan, said: “This will facilitate linking expenditure to outcomes and better public expenditure.” It also said all public expenditure should have “management approach based on measurable outcomes”, indicating this too should be the job of the finance ministry.
Questioning the wisdom of the report, Planning Commission members asked Ahluwalia if it implies that the “panel's role gets diluted”.Before the release, Ahluwalia held a meeting of the “internal planning commission”, whose members sought clarity on the commission's role vis-à-vis the finance ministry. At the report's release, Dr Rangarajan suggested that all public expenditure should be split only into “capital” and “revenue” expenditure.
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