5 may 07r. sridharan, jt secretary (state plans), planning commission 1 karnataka’s 11 th five...

5 May 07 R. Sridharan, Jt Secretary (State Plans), Planning Commission

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Karnataka’s 11th Five Year plan

Some Aspects and Issues


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Approach paper

• GDP growth targets need to be supplemented by monitorable targets for other dimensions of performance

• Agriculture should grow at least at 4 %; 70 million non-agri jobs to be created

• Investment rate should go up to 35.1% from 27.8%; Half of this increase has to come from public investment

• MSMEs to be encouraged• Marginalised groups to be given special attention• Increase of 2.5 % in GBS required: Health 1 %; Irrigation

and Rainfed Areas 0.5 %; Education 0.75 %; NREGA 0.75 %; Infrastructure x %; offset by some weeding out and reprioritisation


3

Public Investment

• States GBS to Plan to grow from 4.62% (06-07) of GDP to 7.26% (11-12); average 5.86%; but does not factor in pay revision

• PPP in infrastructure needed to bridge resource gap; should achieve additional supply at reasonable cost; pvt resources should go into public projects


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Karnataka Monitorable Targets

Target Current Level

11th Plan Goal NFHS 3

IMR 49 24 43

MMR 228 76

TFR 2.4 1.7 2.1Malnutrition (0-3) 43.9 22.0 41Anaemia (15-49) 42.4 21.2 50.3Sex ratio (0-6) 946 969


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Karnataka Monitorable Targets

Target Current Level 11th Plan Goal

Literacy Male 76.10 92.38

Literacy Female

56.87 85.95

Gender Gap 19.2 6.4

Drop out Rate (EE)

45.53 24.72

Poverty Ratio 24.9 12.4


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Karnataka Poverty Ratios

State/

Nation Rural Urban Total

Karnataka No. of persons (lakhs)

(%) No. of persons (lakhs)

(%) No. of persons (lakhs)

(%)

URP * 2004-05

75.05 20.8 63.83 32.6 138.89 25.0

1993-94

95.99

29.88 60.46 40.14 156.45 33.16 MRP** 2004-05

43.33 12.0 53.28 27.2 96.0 17.4

1999-2000

59.91 17.38 44.49 25.25 104.40 20.04

URP*Uniform (30 day)Recall period for all consumption items **MRP:365 day for 5 infrequently purchased non-food items and 30 days for others


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ItemsNinth Plan Projection

% Actuals (Current Prices)

%

(1) (2) (3) (4) (5)Rs. in Crore

A. STATE's OWN RESOURCES (1 to 12) 17,251.93 73.73 23,731.69 75.22

1. Balance from Current Revenues 6,967.79 29.78 998.54 3.17

2. Contribution of Public enterprises 1,023.05 4.37 1,090.88 3.46

3. State Provident Funds 1,473.37 6.30 3,039.56 9.63

4. Miscellaneous Capital Receipts (Net) -1,897.63 -8.11 -1,711.47 -5.42

5. Special Grants under TFC 385.79 1.65 589.69 1.87

6. Loans against net small savings 2,022.47 8.64 4,896.40 15.527. Open Market Borrowings (Net) (SLR Based) 1,266.85 5.41 3,357.30 10.648. Negotiated Loans (a to f) and other Finances 2,001.35 8.55 2,696.06 8.55

9. Bonds / Debentures (Non-SLR Based) 3,108.89 13.29 9,256.35 29.34

10. ARM agreed at DC - CM Discussions 900.00 3.85 0.00 0.00

11. Adjustment of Opening balance 0.00 0.00 -481.62 -1.53

12. Net surplus from Local Bodies 0.00 0.00 0.00 0.00

B. CENTRAL ASSISTANCE (13 to 15) 6,148.07 26.27 7,816.42 24.78

13. Normal Central Assistance 3,643.04 15.57 2,374.42 7.53

14. Assistance for Externally Aided Projects 2,505.03 10.71 3,871.22 12.27

15. Others 0.00 0.00 1,570.78 4.98

C. AGGREGATE PLAN RESOURCES (A+B) 23,400.00 100.00 31,548.11 100.00

Resources During Ninth Plan: Karnataka


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Items Tenth Plan Projections

% Actuals (Curr. Prices)

% Actuals (Const. Prices)

%

Rs. in Crore

(1) (2) (3) (4) (5) (6) (7)

A. STATE'S OWN RESOURCES (1 to 12) 25,565.40 58.69 44,908.88 78.83 40,965.45 81.00

1. Balance from Current Revenues 5617.43 12.90 16,293.78 28.60 13922.31 27.53

2. Contribution of Public Enterprises 48.64 0.11 6,553.47 11.50 7432.03 14.69

3. State Provident Funds 3601.23 8.27 3,481.13 6.11 3070.48 6.07

4. Miscellaneous Capital Receipts (Net) -5546.65 -12.73 -12,807.23 -22.48 -11291.73 -22.335. Special Grants for Upgradation & Special Problems 641.11 1.47 600.67 1.05 523.71 1.04

6. Net Small Savings 6026.80 13.84 13,802.40 24.23 12320.29 24.36

7. Net Market Borrowings (SLR Based) 5129.05 11.78 5,798.97 10.18 5312.55 10.50

8. Negotiated Loans 4,705.27 10.80 3,560.69 6.25 3022.37 5.98

9. Bonds/Debentures (Non-SLR Based) 5366.74 12.32 7,525.09 13.21 6756.17 13.36

10. ARM 0.00 0.00 0.00 0.00 0.00 0.00

11. Adjustment of Opening Balance 52.64 0.12 -82.45 -0.14 -73.75 -0.1512. Net Surplus of Local Bodies/Reimbursement of CST collecions 0.00 0.00 -65.36 -0.11 -28.97 -0.06

B. CENTRAL ASSISTANCE (13 to 15) 17,992.82 41.31 12,056.94 21.17 9,610.26 19.00

13. Normal Central Assistance 3214.83 7.38 2,314.45 4.06 1728.97 3.42

14. ACA for EAP 10770.06 24.73 6,014.96 10.56 4654.14 9.20

15. Others 4007.93 9.20 3,727.53 6.54 3227.15 6.38C. AGGREGATE CORE PLAN RESOURCES (A+B) 43,558.22 100.00 56,965.82 100.00 50,575.70 100.00

Resources During Tenth Plan: Karnataka


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Karnataka

Approved Scheme of Financing for the Annual Plan - 2007-08

ItemsAnnual Plan

2007-08 (Rs. Crore)% of Total

1. State's Own Resources 5795.80 32.59

(a) BCR 5617.82 31.59

(b) MCR -1.62 -0.01

© Plan grants from GoI (TFC) 179.60 1.01

(d) ARM 0.00 0.00

(2) State's Borrowings (i-ii) * 5985.41 33.66

(i) Gross Borrowings 6605.90 37.15

(ii) Repayments 620.49 3.49

State's Resources (1 + 2) 11781.21 66.25

(3) CENTRAL ASSISTANCE-GRANTS (a+b+c) 1945.04 10.94

(a) Normal Central Assistance 292.90 1.65

(b) ACA for EAP 433.81 2.44

© ACA for Others(Details at Annexure) 1218.33 6.85

Total A : State Government Resources (1+2+3) 13726.25 77.19

B. Public Sector Enterprises (PSEs)

(1) Internal resources 746.33 4.20

(2) Extra Budgetary Resources 3310.00 18.61

(3) Budgetary support 0.00 0.00

Total B : PSEs (1+2+3) 4056.33 22.81

D. AGGREGATE PLAN RESOURCES (A+B+C) 17782.58 100.00


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Year Normal Central

Assistance

ACA for EAPs ACA for Special and

Other Programmes

Total Central

Assistance

(2+3+4)

Share in

Central Taxes

1 2 3 4 5

1997-98 13135.53 9484.09 6977.35 29596.97 40411.20(44.00) (32.00) (24.00) (100.00)

1998-99 14120.47 10779.98 8836.5 33736.95 39421.20

(42.00) (32.00) (26.00) (100.00)

1999-2000 15573.64 12860.74 9698.38 38132.76 44121.10

(41.00) (34.00) (25.00) (100.00)

2000-2001 15751.76 11084.69 10471.95 37308.4 50733.70

(42.00) (30.00) (28.00) (100.00)

2001-02 16198.15 18436.43 11562.92 46197.5 52215.30

(35.00) (40.00) (25.00) (100.00)

2002-03 18978.74 19572.5 15628.5 54179.74 56655.30

(35.00) (36.00) (29.00) (100.00)

2003-04 20934.47 19445.53 18482.69 58862.69 67079.00

(36.00) (33.00) (31.00) (100.00)

2004-05 23462.68 17185.15 23576.3 64224.13 78549.60(37.00) (27.00) (37.00) (100.00)

2005-06(Grants) 12838.74 5589.26 16110.2 34538.1992722.52

(37.00) (16.00) (47.00) (100.00)

2006-07(Grants) 14055.2 4947.56 19807.02 38809.78113447.96

(36.00) (13.00) (51.00) (100.00)

Figures in parenthesis indicate the relative share of NCA, ACA f or EAPs and ACA f or Other

Programmes/ Scheme in Total Central Assistance.

Ninth Plan Period

Tenth Plan Period

Total Central Assistance for the Annual Plans During Ninth Plan (1997- 98 to 2001- 02) & Tenth Plan

(2002- 03 to 2006- 07) for All States

(Rs crore)


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SECTORAL PERFORMANCE OF KARNATAKA DURING NINTH PLAN (Rs. Crores)

Sl. No.

Major Heads of Development Ninth Plan (1997-02) - Projected

Outlay (at 96-97 prices)

% age to Total Outlay

Ninth Plan (1997-02) -

Actual Expenditure (at current prices)

% age to Total

Expenditure

1. 2. 3. 4 5. 6.

I. Agriculture & Allied Activities 1464.00 6.26 1414.37 4.54

II. Rural Development 1178.61 5.04 1287.46 4.14

III. Special Area Programmes 555.00 2.37 359.92 1.16

IV. Irrigation & Flood Control 6170.00 26.37 9309.25 29.91

V. Energy 3740.36 15.98 4422.20 14.21

VI. Industry & Minerals 1026.00 4.38 1052.63 3.38

VII. Transport 1740.00 7.44 2307.28 7.41

VIII. Communications 0.00 0.00 0.00 0.00

IX. Science & Technology 40.00 0.17 20.50 0.07

X. General Economic Services 105.00 0.45 731.10 2.35

XI. Social Services 7206.03 30.80 9931.98 31.91

Education 1713.00 7.32 2094.28 6.73

Medical & Public Health 1100.00 4.70 1131.00 3.63

Water Supply & Sanitation 1350.00 5.77 2470.89 7.94

Housing 938.03 4.01 1512.64 4.86

Urban Development 750.00 3.21 906.47 2.91

Others Social Services 1355.00 5.79 1816.70 5.84

XII. General Services 175.00 0.75 288.87 0.93

Grand Total 23400.00 100.00 31125.56 100.00


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SECTORAL PERFORMANCE OF KARNATAKA DURING TENTH PLAN(Rs. Crores)

Sl. No.

Major Heads of Development TenthPlan (2002-07) - Projected

Outlay

% age to Total

Outlay

TenthPlan (2002-07) - Anticipated Expenditure

% age to Total

Anticipated Expenditure

1. 2. 7. 8. 9. 10.

I. Agriculture & Allied Activities 2346.94 5.39 2865.54 4.98

II. Rural Development 2227.72 5.11 2524.62 4.39

III. Special Area Programmes 640.74 1.47 293.29 0.51

IV. Irrigation & Flood Control 14176.57 32.55 17099.28 29.73

V. Energy 2266.95 5.20 7439.10 12.93

VI. Industry & Minerals 1452.87 3.34 937.21 1.63

VII. Transport 4854.44 11.14 6968.37 12.12

VIII. Communications 0.00 0.00 3.00 0.01

IX. Science & Technology 25.78 0.06 80.50 0.14

X. General Economic Services 895.63 2.06 1758.09 3.06

XI. Social Services 14182.98 32.56 17051.43 29.65

Education 1851.01 4.25 4028.27 7.00

Medical & Public Health 1530.52 3.51 1136.92 1.98

Water Supply & Sanitation 3057.19 7.02 2842.17 4.94

Housing 2583.30 5.93 2981.74 5.18

Urban Development 3229.39 7.41 3387.96 5.89

Others Social Services 1931.57 4.43 2674.37 4.65

XII. General Services 487.60 1.12 495.94 0.86

Grand Total 43558.22 100.00 57516.37 100.00


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In percent

Year Public

Expenditure ratio

Social Allocation Ratio

Social Priority Ratio

Human Expenditure

Ratio

1990-91 17.78 41.22 55.45 4.06

1991-92 17.61 40.20 53.72 3.80

1992-93 19.18 36.77 52.54 3.71

1993-94 18.45 39.50 54.03 3.94

1994-95 17.70 39.19 53.83 3.73

1995-96 17.79 37.62 51.94 3.48

1996-97 17.75 36.90 51.02 3.34

1997-98 16.73 38.40 51.99 3.34

1998-99 16.33 39.49 52.55 3.39

1999-00 18.09 37.75 54.86 3.75

2000-01 18.22 37.89 52.84 3.65

2001-02 20.06 34.96 52.29 3.67

2002-03 18.83 34.36 50.69 3.28

Indicators of Expenditure on Social Sectors in Karnataka


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Social Sector Expenditures

• SAR declined from 41% to 34% over 90-91 to 2002-03 in spite of pay revision

• SPR declined by 5% over the same period• Desirable HER of 5% vs actual of 3.28% in

2002-03; but better than Kerala and TN; highest growth rate among states in per capita

• HDR estimates reqmt at extra 2.5% of GSDP for meeting 10th Plan targets; of which 0.5% may come from GoI


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Stock Taking

• New plan formulation is the occasion to subject schemes to evaluation and ZBB

• GoI has reduced CSSs from 155 to 82 and several Central Sector Schemes and is continuing the process

• MTFP is virtually a rolling FYP, both for plan and non-plan expenditures


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Regional Imbalances

• Rs 307.16 crores additional allocation for 114 talukas based on CCDI

• Use of Inverse of CCDI without weighting by population could lead to anomalous results

• Plan and Non-Plan allocations should be taken together, especially in social sectors

• Sectoral components of the CCDI could be linked to sectoral allocations


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In percent

Year Public

Expenditure Ratio

Social Allocation Ratio

Social Priority Ratio

Human Expenditure

Ratio

2006-07 21.39 31.71 69.21 4.69

2007-08 21.57 30.43 69.03 4.53

2008-09 21.36 29.98 68.11 4.03

2009-10 20.86 29.99 67.73 4.23

Indicators of Expenditure on Social Sectors in Karnataka (MTFRP)


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The Way Forward - KHDR

• 1999 HDR – state at median level; recommended increased outlays and better targeting, spatially and towards poor and marginalised groups

• 2005 HDR: Healthcare spending to go up to 3 % of GSDP; education to 6 %; better targeting

• “Conspicuously successful” programmes are housing, drinking water, electrification of SC/ST houses; but healthcare and education not so


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The Way Forward - KHDR

• Participatory decision making in gram sabhas has not led to priority to HD agenda

• GPs should monitor a set of HD indicators periodically

• HD indicators should be used in resource allocations


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Central Assistance – Likely Trends

• FRBM Act will be the binding constraint• GoI’s RD to be reduced to Zero in 2008-09 from

1.5 % in 2007-08 BE; since all CA is now only grants, this target directly impacts CA

• NCA likely to grow more slowly than CA for Flagship schemes, Bharat Nirman etc ?

• 07-08 NCA is 10 % over 06-07; Rs 16408.02 crs vs total of Rs 50160 crs (excldg CSS)

• Share in Central Taxes increasing faster than NCA (25.63% BE 07-08 over BE 06-07 vs 10 %)


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PPP and Viability Gap Funding• IIFCL set up to provide long term debt finance, either directly or by refinance• Will cover up to 20 % of project cost• Priority for PPP projects awarded to pvt cos through competitive bidding;

public sector cos also covered• PPP project – one based on a contract/concession agreement between

Govt or stat entity on one side and a pvt co on the other for delivering an infrastructure service on payment of user charges

• IIFCL will finance only commercially viable projects (Incldg those that attain viability after VGF)

• 46 (2) projects, cost Rs. 60373.50 (4785.07) crores, IIFCL funding Rs. 6541.92 (568) crores sanctioned so far

• For VGF, govt should certify that viability cannot be improved by higher tariff, longer concession period, lower capital cost etc. VGF is the bidding criterion

5 may 07r. sridharan, jt secretary (state plans), planning commission 1 karnataka’s 11 th five...

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