Finance ministry plans to rationalise non-capital spending
The finance ministry plans to rationalise non-capital expenditure to complement the price-busting measures of the Reserve Bank of India (RBI).
Senior finance ministry officials have asked various ministries and government departments to avoid new schemes with significant revenue expenditure.
Ministries and departments have been told that they should not expect additional funds in the revised estimates for revenue expenditure.
The government is being cautious as fiscal slippages could undermine RBI’s efforts to manage inflation. The departments need to stick to budget estimates, senior officials added.
The fiscal deficit for the fiscal is set at 6.4 per cent of GDP.
But the government has already reduced petrol and diesel duties while raising the subsidy on fertilisers.
Last week, the government reduced the windfall tax on domestic oil and gas players.
The budget has prescribed an expenditure of over Rs 39.44-lakh crore, out of which capital expenditure has been estimated at over Rs 7.50-lakh crore, while the remaining Rs 32-lakh crore is revenue expenditure.
The austerity measure could lead to the deferment of certain new schemes, including a Rs 16,635-crore programme for the textiles sector that has been in the works for some time.
The new scheme aims to replace the Technology Upgradation Fund Scheme (TUFS) and promote integrated manufacturing facilities for the sector.
Similarly, the government is unlikely to widen the scope of the flagship tax remission scheme for exporters — RoDTEP — to include sectors such as steel and pharma.
The budget has earmarked Rs 13,699 crore for the RoDTEP scheme for FY23.
Officials said the expenditure management bid would not impact schemes for which substantial budgetary outlay has already been earmarked for FY23 such as the rural jobs scheme and rural drinking water scheme.
■ Ministries told not to announce new schemes which will raise revenue expenditures
■ Some schemes may be deferred: the textiles promotion scheme and the extension of export duty rebate scheme to new areas
■ Schemes where substantial budgetary outlay has been made will not be affected