With the total expenditure at about 97% of the budgeted amount as it ended the financial year 2018-19, the central government is hopeful of maintaining the fiscal deficit target at 3.4% of the GDP despite a shortfall in revenue receipts.
The shortfall will be met with the help of unspent amount, some spending cuts and National Small Savings Funds (NSSF), finance ministry sources said.
The government expenditure has been compressed by around Rs 60,000 crore, which includes savings from ministries at around Rs 47,000 crore and a spending cut of close to Rs 9,000 crore. The finance ministry has managed to compensate the remaining shortfall by dipping into the NSSF.
"The revenue collection is less than expected. But we have managed our expenditure through other resources," a senior finance ministry official said.
Revenue collections have seen a major shortfall during 2018-19, with direct taxes likely to see a shortfall of Rs 40,000 crore and indirect taxes of Rs 70,000-80,000 crore.
"We are maintaining the fiscal deficit target. There is a shortfall in resources due to which we have to delve into public accounts and spend from NSSF. While we have maintained the expenditure level, there have been savings in the normal course without putting any pressure on the ministries. If we take into account expenditure along with NSSF, then the expenditure will be around 97%," the official said.
The government is likely to have spent about Rs 23.96 lakh crore out of the total budgeted expenditure of Rs 24.57 lakh crore for the financial year 2018-19. This includes mostly savings from ministries and also some portion of the expenditure cut.
"Of the total expenditure, the ministries could not spend around Rs 47,000 crore by March 31. An amount of Rs 9,000 crore was withheld by the finance ministry on the last day of the financial year. This could not have been utilised. The rest were savings in the normal course which happen every year," a source said.
There were about 8-10 ministries which could not spend the allocated funds in time. Some amount under PM-Kisan and Ayushman Bharat schemes also remained unspent.
According to experts, the government has a cushion of overshooting the fiscal deficit number by 0.08% to 3.44% as it would be rounded off to 3.4%. However, it will be difficult for the government to achieve the fiscal deficit target in absolute terms, they said. The fiscal deficit has been budgeted at Rs 6.34 lakh crore for 2018-19.
Meanwhile, higher non-tax revenue collections, and disinvestment proceeds crossing the Rs 80,000 crore target by Rs 5,000 crore will help compensate for the shortfall in tax revenues. An amount of Rs 15,000 crore from Goods and Services Tax (GST) Compensation Cess carried forward from last year has also led to a reduction in the indirect tax-shortfall.
CUTTING EXPENDITURE
- Rs 60,000 crore – Compression in government expenditure
- Rs 47,000 crore – savings by the ministries