FY14 Budget likely to see expenditure freeze

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SummaryIn what would be a strong signal to markets and investors, the government is set to revise downwards the budgetary expenditure for 2012-13 by 9% to Rs 13.6 lakh crore from the initially estimated R14.9 lakh crore and peg the size of Budget 2013-14 at roughly the same level as the revised figure for this fiscal.

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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