JOIN USGovernment eyes unspent funds to check fiscal deficit: Report
The government is eyeing to utilise unspent funds that were allocated for government schemes in the 2019-20 financial year to help check its fiscal math, according to a report by Hindustan Times.
The total unspent money was Rs 9.66 lakh crore, or 34.7% of the Rs 27.86 lakh crore budgeted for 2019-20 as on November 2019, according to official data of the Controller General of Accounts (CGA). A year ago, the total unspent money was Rs 7.83 lakh crore, or 33.9% of the budgeted expenditure of Rs 23.11 lakh crore.
The Finance Ministry has directed several departments to not indulge in last-minute spending. "On Friday, the finance ministry issued an instruction to all ministries not to indulge in last minute spending considering the fiscal position of the government in the current financial year," one of the sources aware of the development told the publication.
"Rush of expenditure particularly in the closing months of financial year, shall be regarded as breach of financial propriety and shall be avoided," the directive read.
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The order further stated that ministries cannot spend more than 15% of the budget estimate (BE) in two months (January and February 2020) and 10% of BE in the last month (March 2020) with some exemptions, the person added.
A similar order was issued earlier on December 27, 2019. It is believed that a large chunk of the unspent money could be saved as a result of such a move.
The country's fiscal deficit as on December 31, 2019, was about 3.83% of the GDP, but it is expected to go down significantly by March 31, 2020. Earlier, former Finance Ministry official, Subhash Chandra Garg claimed that the government is understating the fiscal deficit.
India targeted a budget gap of 3.3% of gross domestic product for the year ending March -- one that is widely expected to be missed by as much as 0.5 percentage points as asset sale plans falter and an economic slowdown hurts tax collections. However, Garg sees the real shortfall -- which includes on-and off-budget borrowings -- widening to at least 4.5% against 3.55% estimated previously.