Full Budget to be presented on July 5
Our Bureau New Delhi | Updated on May 31, 2019 Published on May 31, 2019 BUSINESS LINE
Will have limited scope for additional expenditure
The full Budget for the current fiscal year will be presented on July 5, the Government announced on Friday. Meanwhile, the Finance Ministry has made it clear that barring an exceptional situation, there will not be any change in the expenditure proposed in the Interim Budget.
The Budget will be presented by Finance Minister Nirmala Sitharaman.
In a letter to all the financial advisors in the Central Government Ministries and Departments, Arvind Shrivastava, Joint Secretary in the Finance Ministry, said that allocations projected in the Interim Budget will not be altered. However, “if there are any requirement on account of unavoidable commitments that have not been fully provided for in the Interim Budget, the Ministry/Department may propose the same for consideration for inclusion in the Regular Budget 2019-20 with suitable justification,” the letter said, adding that all the ministries should send additional requirement subject to conditions mentioned.
On the Interim Budget, it was said, “Budget 2019-20 reflects the Government’s firm commitment to substantially boost investment in agriculture, social sector, education and health. This is substantiated by increase in expenditure of ₹3,26,965 crore over RE i.e. Revised Estimate (2018-19), while keeping the fiscal deficit at 3.4 per cent of GDP.”
In RE 2018-19, the total expenditure has been kept at ₹24,57,235 crore and is more than BE 2018-19 by ₹15,022 crore. The increase in total expenditure is on account of increased support to agricultural sector, interest payments and internal security. Now, the Government might have to increase allocation for expenditure as the BJP Sankala Patra (Commitment Document released on the eve of general election) promised expanding the Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN) to all the farmers than only small and marginal farmers.
As of now, PM-KISAN covers about 86 per cent of farmers (nearly 12.50 crore) and ₹75,000 crore has been allocated for the same. A rough estimate suggests that bringing all the farmers under the scheme will require additional allocation of ₹10-12,000 crore. There is also a promise of pension scheme for traders and farmers which will require additional allocation. The Government would like to introduce this scheme in the current fiscal year.
The problem with the Ministry is that there is very limited scope for any additional expenditure except when there is windfall gain on the revenue front. However, as of now, the situation is not so. GST collections did touch ₹1 lakh crore during the first month of the current fiscal, but even maintaining that level is not easy considering the current situation of the industrial sector. At the same time, the targeted growth rate for direct tax is 20 per cent, but after less-than-estimated collections during 2018-19, the thinking is to revise the target for the current fiscal.
Meanwhile, another senior Finance Ministry official said the regular Budget will put more focus on non-tax revenue, especially from disinvestment. The Government’s think-tank NITI Aayog submitted a list of about 40 Central Public Sector Enterprises (CPSEs) for divestment, which in due course was approved by the Union Cabinet during the previous regime. This includes strategic disinvestment in Air India.
Published on May 31, 2019