Finance Ministry expects ‘good savings’ in the current financial year as many Central Ministries and Departments have spent less than accounted for. This could mean their allocation is likely to be lowered in the revised estimate which, in turn, will help in meeting expenses on some key schemes besides limiting the deficit according to budget estimate.
According to officials, Revised Estimates of a fiscal year are finalised on the basis of expenditure of budget allocation of the first six months. Similarly, Budget Estimate for the next fiscal is calculated on the basis of expenditure during the first nine months of the current fiscal. Data from the Controller General of Accounts (CGA) showed that all the central Ministries have spent over 47 per cent during first six months of current fiscal which rose to 53 per cent in the first seven months mainly on account of higher expenses by Road and Rail. Eight months data will be made public on December 31, while initial indication of nine months expenditure will be known to the government early next month.
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A deep dive into seven months (April-October) data showed that 15 Central Ministries and Departments have spent have spent not more than one-third of the budget allocation. It was almost similar in the first six months (April-September). In fact, Minority Affairs Ministry expenditure has been recorded as negative. Some Ministries have spent between 5-15 per cent during 7 months. Because of lower expenditure, their revised estimates will be less than budget estimate. Officials confirmed that earlier too, savings up to ₹2 lakhs in a fiscal was possible which helped the government to limit the deficit.
Officials said that during the current fiscal there will be “good savings” but refused to give an exact amount.
Provisional ceilings for expenditure finalised during these meetings have been communicated to the various Ministries and Department. Now, these figures are expected to be made public on February 1, when Finance Minister Nirmala Sitharaman will present the interim budget.
Meanwhile, use of savings was reflected in the First Supplementary Demands (SDG) for Grants for FY24. This has proposed fresh outgo of little over ₹58000 crore while additional expenditure of around ₹71000 crore is to be met by savings of the Ministries and Departments. The document, approved by Lok Sabha showed that additional expenditure in the form of more funds for the rural employment guarantee scheme will be met through savings, recovery/receipts. The same mechanism has been proposed for recapitalisation of regional rural banks and for funds infusion in public sector insurance companies on account of the award of bonus shares issued by the companies.
Revenue from direct taxes and GST are showing good growth. This combined with savings are expected to help the government to keep the fiscal deficit within budget estimate of 5.9 per cent or ₹17.86 lakh crore. During the first seven months, deficit was 45 per cent of the budget estimate.
