Centre, states will now spend more on social sector: Jaitley

New Delhi, March 17 (IANS) Denying that in the union budget 2015-16 he cut funding for social schemes like rural employment or women and child development, Finance Minister Arun Jaitley on Tuesday said the money the Centre and the states would collectively spend on the sector would actually increase.

Referring to his "compressed fiscal space" arising out of the union government accepting the 14th Finance Commission's recommendations for increasing the states' share of the divisible pool of taxes from 32 percent to a record 42, Jaitley told the Lok Sabha that he was "10 percent poorer this year, because you're 10 percent richer in the states. On women and child development, together we'll collectively spend more".

"The Indian governance system is one of shared soverignty. The country as a whole is going to spend more, though my allocation may be less," Jaitley said replying to the debate on his first full budget presented last month.

Even as he announced a range of social security schemes, there were heavy cuts in social sectors ranging from agriculture, drinking water and sanitation to panchayat raj, water resources and women and child development ministries to the tune of Rs.439,192 crore, in order to keep the fiscal deficit target.

Jaitley has extended the deadline for controlling fiscal deficit to three percent, reasoning that insistence on a timetable to contain the deficit would harm growth prospects.

The targets for the next three years have been set at 3.9 percent for 2015-16, 3.5 percent for 2016-17, and 3 percent for 2017-18.

In this connection, he pointed out that the "collective fiscal deficit of the states is at 2.3 percent (of GDP), which is better than that of the Centre".