The Centre’s capital expenditure has reached around 80% of the revised estimate (RE) for the current financial year so far while the revenue expenditure is around 79% of the RE, an official said, adding that the government was on track to achieve the fiscal deficit target of 5.8% of GDP for the year.
With the market borrowing for the current fiscal year over and mobilisation through small savings on track, the government’s cash position is comfortable to meet the budgeted expenses of Rs 44.9 trillion for FY24 with little variation.
In FY24RE, the government has enhanced the revenue expenditure outlay to Rs 35.4 trillion for the year compared with Rs 35 trillion in BE while the outlay for capex was lowered to Rs 9.5 trillion from Rs 10 trillion in BE as some departments could not spend.
“After just in time release and avoidance of parking of funds we have achieved accuracy of budget estimates to the level of a few thousand crores,” the official said.
Based on the revised estimate, two instalments of tax devolution are expected by early March and one instalment in late March, the official said adding that it would improve the liquidity of the states. Analysts have said higher devolution would reduce the states’ borrowings in February-March 2024. The Centre has sharply revised upwards tax devolutions, from Rs 10.2 trillion in FY24BE to Rs 11 trillion in FY24RE.
The government’s dividends from the Reserve Bank of India (RBI) in FY25 could be similar to FY24, sources said, without giving a specific number.
RBI’s surplus transfer to the Centre rose 188% on year to Rs 87,416 crore in FY24 (for accounting year FY23), which was very close to Rs 91,000 crore estimated from dividend receipts from the RBI, public sector banks and financial institutions (Rs 48,000 crore) and the CPSEs (Rs 43,000 crore) in FY24BE.
This helped the government lower the fiscal deficit target to 5.8% of GDP for FY24RE from 5.9% in the budget estimate. For FY25, the government has budgeted a 1.02 trillion rupees surplus transfer from RBI and public sector banks.
Receipts under the National Small Saving Fund (NSSF) stood at Rs 2.77 trillion (or 64% of the revised estimate) so far in FY24 compared with Rs 1.91 trillion in the year-ago period.
The collections were robust under the revamped Senior Citizen Savings Scheme rose 1.4 times to Rs 90,000 crore till end-January of FY24 while the receipts under the Monthly Income Scheme rose four times to Rs 20,000 crore during the period. The Mahila Samman Savings Certificate Scheme (MSSC) has garnered Rs 19,000 crore so far in the current financial year.
The finance ministry recently revised guidelines on financial limits to be observed in determining cases relating to ‘New Service’/ ‘New instrument of Service’ to give departments more financial powers to implement schemes, which will enhance the pace of spending.