The Planning Commission has asked the state governments to hold back their demands for additional fund till November in view of slow economic recovery.
"We have asked the states to hold back their demand for additional Plan spending till November end in view of prevailing economic situation. We may take a call on these demand only after November after assessing the economic scenario," Planning Minister Rajeev Shukla told PTI.
According to experts, India's economic situation has been improving slowly till now, going by the dismal economic growth of 4.4 per cent in the first quarter (April-June) this fiscal year.
The Asian Development Bank (ADB) in its recent forecast has lowered the growth projection for the current fiscal year at 4.7 per cent, down from earlier estimate of 6 per cent.
The next quarterly gross domestic product data would be released by the Ministry of Statistics and Programme Implementation on November 29.
Experts say they would be able to comment about the rebound of the economy only after the second quarter data is available. The country had recorded a decade low economic growth of 5 per cent in the previous fiscal year.
Mr Shukla also said that during the meetings with the states' representatives, they are asked to maintain fiscal discipline.
According to a Finance Ministry circular, the states cannot spend more than 33 per cent of the allocated Plan expenditure in the last quarter (January-March) of this fiscal year and it should not be more than 15 per cent of the total in last month (March) next year.
On any move to cut the Plan expenditure also this time to keep a tab on fiscal deficit, Mr Shukla said, "There has been no discussion with the Finance Ministry on this issue so far."
During the last fiscal year, the government had cut around Rs 92,000 of Plan expenditure to keep the fiscal deficit at 4.9 per cent of GDP.
The government has set a fiscal deficit target of 4.8 per cent of GDP for the current fiscal year. Earlier last month, the Finance Ministry had announced cutting non-plan expenditure by 10 per cent and outlined certain austerity measures to reduce burden on exchequer.
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