FY14 Budget likely to see expenditure freeze
Senior officials from several ministries have confirmed that this year’s expenditure controls will ripple next fiscal too, with an impact on Plan and non-Plan heads. Up to December, total revenue this fiscal grew just 13.8% over the same period a year ago, against the budgeted growth of 22.7%. With GDP growth projected at around 5%, this is near-optimal achievement. No dramatic improvement in revenue growth is expected next fiscal either given the dour growth forecasts.
The rural development ministry will see this fiscal’s biggest budget cut of R20,000 crore — about 25% — from the budgeted allocation. This will be followed by a little over R10,000 crore cut each for defence and railways. Ministries such as heavy industries and human resource development, road and transport are also expected to face sharp expenditure cuts.
On Plan expenditure, spending till December had been 56.8% of the BE or about R2.96 lakh crore. Non-Plan expenditure was 72% of BE at R6.95 lakh crore during the period.
A Prasanna of ICICI Securities said the slump in government spending is dampening public consumption adding this could impact third quarter growth.
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