To meet the fiscal deficit target for this year, the Central government is brutally slashing social sector allocations but is keeping expenditure cuts for the physical infrastructure sectors at a minimum.
This re-aligning of plan outlays across sectors by the Finance Ministry is in line with the government’s priorities. The Narendra Modi government views infrastructure spending as growth-enhancing and an essential element of its plans for reviving the economy.
The Finance Ministry is currently in the process of revising the budget estimates for allocations for 2014-15 across heads of expenditures and ministries.
In the revised estimates plan, expenditure on education is proposed to be cut by Rs. 11,000 crore. Departments of Panchayati Raj, Rural Development and Sanitation are facing average cuts of about 25 per cent.
The health sector plan expenditure revised estimate is proposed to be Rs. 7,000 crore lower than originally envisaged in the budget.