New Delhi: To avoid rush of expenditure in the last quarter of the fiscal, the Finance Ministry has asked all government departments to cap spending in January-March quarter at 33 per cent of the total funds allocated for the full financial year.
In a communication, Expenditure Secretary Ratan Watal has said that departments should “strictly” adhere to the Revised Estimates (RE) ceilings for the current fiscal. He has emphasised on the need to ensure that expenditure is contained within the approved revised estimate ceiling and under no circumstances, “the ceiling is breached”. Watal asked the Additional Secretary and Financial Advisor to the Ministry of Finance “to closely monitor the expenditure during the last quarter of the current financial year and avoid any rush to expenditure”.
The letter said that restriction of 33 per cent and 15 per cent expenditure ceilings in the last quarter of the current financial year and during the month of March respectively is to be strictly adhered to. The fiscal deficit—the gap between government expenditure and revenue—has already touched 100.2 per cent of Budget estimates in the April-December period. The government hopes to contain fiscal deficit at a seven year low level of 4.1 per cent in the fiscal ending March. The government's net tax revenue collection till December end was Rs 5.46 lakh crore or 55.8 per cent of the Rs 9.77 lakh crore estimated for the whole year. As regards proceeds from disinvestment, the government has so far raised Rs 24,500 crore against the target of Rs 43,425 crore.
The fiscal deficit position is likely to improve around March as over Rs 45,000 crore revenue is expected to come from communication services.
The government had earlier appointed an expenditure management commission to rationalise the public expenditure and reduce subsidy. The commission has submitted its interim report to Finance Minister Arun Jaitley. Jaitley is likely to incorporate some of the suggestions in the forthcoming Budget.