Finance Ministry asks ministries to adhere to budget, not ask for additional funds in 2012-13
October, 25th 2012
The Finance Ministry has asked all central ministries to strictly adhere to the budgeted allocation as it would not be possible to provide additional funds because of tight fiscal situation in the current fiscal. "We have strictly asked all administrative ministries to stick to the funds provided in the 2012-13 budget and not seek any further funding under any scheme," a Finance Ministry official said. The Finance Ministry has indicated this to central ministries while working out revised estimates for the current fiscal.
The revised estimates would be presented before Parliament during the Budget for 2013-14. "The revenue is not buoyant. The only way we can control finances is by trimming expenditure. So, we have asked the ministries to stick to their budget allocation," the official added. At the time of revised estimates, various ministries come up with estimates of expenditures for the entire fiscal and furnish them to the Budget division in the Finance Ministry.
Finance Ministry officials have already indicated that it would be difficult for the government to maintain fiscal deficit at the budgeted level of 5.1 per cent of GDP. Besides higher outgo on subsidies, lower rate of growth in tax revenues and poor off-take of disinvestment programme is adding to the fiscal woes of the Centre. During April-September period, gross direct tax collection rose by 5.9 per cent, as against the target of 15 per cent. Indirect tax collections grew at 15.6 per cent, against the annual target of 27 per cent.
The Finance Ministry has said that arranging additional funds will be difficult due to tight fiscal situation in the current fiscal.
Further, with nearly seven months of the fiscal about to get over, the government is yet to start its disinvestment programme, through which it aims to raise Rs 30,000 crore in 2012-13. Finance Minister P Chidambaram, soon after he assumed office in August, appointed a three-member expert panel headed by former Finance Secretary Vijay Kelkar, to suggest fiscal consolidation roadmap.
Among other things, the Kelkar panel recommended hike in price of cooking gas and kerosene, besides making a case for sharp reduction in oil and fertiliser subsidy. Rating agency Standard & Poor's in its recent report had indicated that fiscal deficit could go up to 6.1 per cent of the GDP. In 2011-12, the fiscal deficit was 5.76 per cent.