Millennium Post

Govt cuts spending via aam aadmi, not India Inc

The government on Monday cut Rs 79,790 crore from the budgeted Plan expenditure of Rs 5,55,532 crore for the current financial year against the backdrop of a burgeoning fiscal deficit.

The Interim Budget 2014-15, presented by Finance Minister P Chidambaram in Parliament, projected revised estimates of the Plan expenditure at Rs 4,75,532 crore for 2013-14.

For the next financial year starting 1 April, the government has kept the the Budget Estimates of Plan expenditure unchanged at Rs 5,55,322 crore.

‘In order to sustain the pace of Plan expenditure, I have decided to keep Plan expenditure in 2014-15 at the same level at which it was budgeted in 2013-14. I have provided Rs 5,55,322 crore for Plan expenditure,’ Chidambaram said.

Last year also, the Finance Minister had cut the Plan expenditure to Rs 4,29,187 crore in the revised estimates of the budget from budgeted Rs 5,21,025 crore for 2012-13.

However, the actual Plan expenditure for 2012-13 is even lower than revised estimates, at Rs 4,13,625. Thus, the actual cut in the Plan expenditure for the previous fiscal was Rs 1,07,400 crore.
The Plan expenditure is the government spending on social sector schemes such as Bharat Nirman, rural employment guarantee scheme and National Rural Health Mission. Besides, it includes Centre's assistance to various states and Union Territories Plans.

Chidambaram has pegged the fiscal deficit for the current fiscal at 4.6 per cent of gross domestic product (GDP) and at 4.1 per cent for 2014-15. The government had targeted to keep it at 4.8 per cent for 2013-14 in the last year's Budget. ‘I am confident that there will be no cause for complaint.

If there are any shortcomings, they can be addressed when the regular budget is presented. There is enough flexibility in the expenditure budget to make necessary changes in the allocations within the overall resource envelope,’ Chidambaram said in the Budget speech.

Chidambaram sought to raise total subsidies on fuel, food and fertilisers marginally to over Rs 2.46 lakh crore in the 2014-15 fiscal as government seeks to roll out the food law. Government has increased the food subsidy by a whopping Rs 23,000 crore to Rs 1,15,000 crore for 2014-15 fiscal mainly for implementation of the National Food Security law.

According to the interim Budget proposals, subsidy bill on food, petroleum and fertilisers is estimated at Rs 2,46,397 crore for 2014-15 fiscal against Rs 2,45,452 crore in the revised estimates for this fiscal.

Interestingly, the revised estimates for this fiscal are higher by 11 per cent compared to the budget estimate of Rs 2,20,971.50 crore.

‘Non-plan expenditure in 2014-15 is estimated at Rs 12,07,892 crore. Of this, the expenditure on subsidies for food, fertiliser and fuel will be Rs 2,46,397 crore. This is slightly more than the revised estimate of Rs 2,45,452 crore in 2013-14.,’ Chidambaram said while unveiling the Interim Budget 2014-15 proposals in the Lok Sabha (lower house of Parliament). As much as Rs 65,000 crore has been allocated for fuel subsidy, he added.

‘We have this year (2013-14) absorbed the rollover of Rs 45,000 crore from the fourth quarter of 2012-13 (fiscal) and we will rollover only Rs 35,000 crore from the fourth quarter of this year into the next year,’ the Minister said.

On Food Security Act, Chidambaram said: ‘Rs 1,15,000 crore has been allocated for food subsidy keeping in mind the government’s firm and irrevocable commitment to implement the National Food Security Act throughout the country.’

Industry captains hail anti-people budget

New Delhi:
India inc on  Monday welcomed the interim budget presented by Finance Minister P Chidabaram for its stress on manufacturing.

‘The finance minister has highlighted the importance of the manufacturing sector, which is key to reviving the economy,’ said Kris Gopalakrishnan, president, Confederation of Indian Industries (CII).

‘The reduction in excise duty on sectors such as automobiles, capital goods and consumer electronics is indeed welcome, as this will help revive demand in these sectors.’

According to Gopalakrishnan, ‘It is clear that the government has stayed on the fiscal discipline roadmap and achieving a 4.6 percent fiscal deficit is no small feat.’

CII added that it hoped that the implementation of GST (goods and services tax) should be a priority for the coming government.

Federation of Indian Chambers of Commerce and Industry's (FICCI) president Sidharth Birla said the interim budget was balanced and met industries expectations.

‘The future direction being given with regard to central government finances is good. While this was the last budget of the government, yet the Finance Minister refrained from announcing any large populist measures,’ said Birla.

FICCI added that while many of the ten point charter announced by the finance minister are aspirational, these are all achievable through concerted effort and a coordinated approach between centre and states.

Associated Chambers of Commerce and Industry of India (ASSOCHAM) expected that the relief package for some industrial sectors to continue under the new government to revive the manufacturing when a regular budget is presented in July. ‘While the industry too is disappointed for the country not being able to usher in the major tax reforms in the form of GST, we look forward to the new government to complete the task,’ said Assocham President Rana Kapoor.
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