A high-level government meeting on Wednesday explored ways to rationalise the expenditure on the centrally-sponsored welfare schemes as the Centre targets to rein in the fiscal deficit to 3.4 per cent of GDP in the current fiscal.
The meeting between the officials of the Finance Commission and the finance ministry sought to fit the duration of the schemes to the tenure of the Finance Commission.
The government did manage to meet its fiscal deficit target of 3.4 per cent of GDP for the last fiscal but only after raising it from 3.3 per cent of GDP in the interim budget.
Besides the centrally sponsored schemes, the meeting discussed issues relating to prudential fiscal and economic management.
“On the expenditure trend, there were discussions with regard to rationalisation of the Centrally Sponsored Schemes in sync with the new life cycle, they being co-terminus with the finance commissions,” a statement said.
Centrally sponsored schemes are implemented by the state governments but funded by the Centre with some portion borne by the states.
During the meeting, the Finance Commission officials said the GDP numbers suggested continued high growth over the medium term even though there have been fluctuations within the overall global trend. The Commission noted the revenue projections on direct taxes are healthy, though on indirect taxes, there have been periodic fluctuations.
“The Commission held consultations with senior officials of the Ministry of Finance yesterday (Wednesday) on the overall economic situation and key economic variables,” it added.
The 15th Finance Commission will give its recommendations by October 2019 for five years commencing April 1, 2020.