FINANCE MINISTRY, PLAN PANEL PLOTTING 24% SPENDING CUTS FOR ALL MINISTRIES
With the government in expenditure cutting mode, various ministries are bracing for reduction in their annual budgets for the financial year 2013-14, which could be even up to 24 per cent of this fiscal. While some ministries are reconciled to the anticipated budgetary cut by the Finance Ministry, a few others are protesting against about it.
According to indications to various ministries, the Finance Ministry would be slashing the annual budget of ministries in view of the poor financial health of the economy. 'The Finance Ministry and Planning Commission have said there will be a 24 per cent budget cut for all ministries,' a union minister told PTI.
While the Finance Ministry is headed by Harvard Business School alumnus P Chidambaram, who enjoys strong confidence of the United States government, Western multinational corporations (MNCs) and World Bank-International Monetary Fund (IMF)-World Trade Organisation (WTO) troika, the Planning Commission is headed by Montek Singh Ahluwalia, whose previous assignment was as a director with the IMF's Office of Independent Evaluation.
When contacted for his comments amid apprehensions of severe Budget cuts, Union Rural Development Minister Jairam Ramesh said that it is 'inevitable' and that his Ministry would have to make do with whatever it gets.
'A Budget cut is inevitable given the grim fiscal position. We have to make do with what we get,' he said.
Ramesh seemed to be reconciled even though media reports had suggested that he had written to Finance Minister P Chidambaram, requesting that there should be no cut in the Budget for his ministry.
The Rural Development Ministry was allocated a budget of Rs 85,000 crore during the current (2012-13) fiscal.
Tribal Affairs Minister V Kishore Chandra Deo refused to get into specifics but said that 'if such a huge cut' is done in the budget for a ministry like his, 'then hardly anything will be left for it'.
The Tribal Affairs Ministry was sanctioned a budget of approximately Rs 4,000 crore for the current financial year.
Deo said that there should not be any budget cut in the social sector ministries, keeping in mind the small size of their annual allocations.
'How much will you gain by cutting the Budget of the Tribal Affairs Ministry and others in the social sector, whose entire allocation is not too big. This way the ministries will not be able to meet their target of bridging the social gap,' he pointed out.
Deo has already written letters to Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia on the matter.
'I have written to Finance Minister P Chidambaram and Planning Commission Chief Montek Singh Ahluwalia over this and I think that on this area — the social sector — they should not cut the Budget so massively, he asserted.
The Women and Child Development Ministry too is bracing for a massive Budget cut, with a senior official saying that the Finance Ministry has already told them to spend only 33 per cent of the revised estimate for the last quarter of the current financial year.
The Defence Ministry suffered a cut of Rs 12,000 crore in the revised budget of Rs 1.93 lakh crore in the current fiscal.
Besides, its request for an additional Rs 40,000 crore in the current fiscal too was turned down by the Finance Ministry.
FOREX RESERVES UP BY $77 MN
India’s foreign exchange reserves increased by $77.6 million to $295.74 billion for the week ended Jan 27, according to RBI data. The reserves dipped by $580.3 million to $295.67 billion for the week ended Jan 18, 2013. The foreign currency assets (FCA), the biggest component of the forex reserves, went up by $79.3 million at $261.70 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI). The FCA were lower by $646.8 million at $261.62 billion in the previous week.
The RBI said that FCA in US dollar terms included the effect of appreciation or depreciation of non-US currencies held in reserve, such as the pound sterling, euro and yen. Gold reserves value remained the same at $27.21 billion. Reserves with the International Monetary Fund (IMF) went down by $0.2 million to $2.38 billion during the week under review. (IANS)
PLAN EXPENDITURE FACES SUBSTANTIAL DOWNSIZING
Seeking to restrict the country's fiscal deficit to 4.8 per cent of gross domestic product (GDP), the Finance Ministry is likely to make a substantial reduction in its Plan Expenditure for the 2013-14 financial year.
Finance Minister P Chidambaram has already committed to restricting the fiscal deficit for the current financial year to 5.3 per cent of gross domestic product and lower it further to 4.8 per cent of GDP next fiscal.
Sources said that the axe may fall on Plan Expenditure next year in order to restrict the fiscal deficit as per the road map under which it has to be lowered to 3 per cent by the financial year 2016-17.
The Finance Ministry, they said, will also scrutinise the utilisation of funds alloted in the current fiscal before releasing any amount for next year in the Budget, which is scheduled to be announced on 28 February.
According to data of the Controller General of Accounts (CGA), Plan Expenditure has been 56.8 per cent of the Budget estimates or about Rs 2.96 crore till December. However, non-Plan Expenditure has been 72 per cent of the Budget estimated at Rs 6.95 lakh crore.
Seeking to contain the fiscal deficit to 5.3 per cent of gross domestic product this year, the Finance Ministry has already asked all government departments to cap spending in the January-March quarter at 33 per cent of the total funds allocated for the full financial year.
'The restriction of 33 per cent and 15 per cent expenditure ceilings (in the last quarter of the current financial year and during the month of March respectively) is to be enforced both scheme-wise as well as for the demands for grant as a whole,' the ministry had ordered.
The government had hiked the fiscal deficit target for the current fiscal to 5.3 per cent of gross domestic product, up from the 5.1 per cent estimated in Budget.
The Government's fiscal deficit touched 78.8 per cent of the budget estimates (BE) in the first nine months of the current financial year (April-December 2012).
The rising subsidy bill and lower-than-expected revenue realisation has put pressure on government finances in the ongoing fiscal.
On the disinvestment side, the government has been able to raise just over Rs 10,000 crore so far against the target of Rs 30,000 crore for the entire 2012-13 fiscal year.
In November the government sought approval of the Lok Sabha for additional expenditure of about Rs 32,120 crore for this fiscal, mainly to meet the increasing oil subsidy bill and provide Rs 2,000 crore to the ailing Air India.
Of the total, Rs 28,500 crore will be used to compensate oil marketing companies (OMCs) on under-recoveries towards sale of subsidised petroleum products.
With the additional grant, the total funds earmarked for oil subsidy will soar to about Rs 72,260 crore in fiscal 2012-13.
With the government in expenditure cutting mode, various ministries are bracing for reduction in their annual budgets for the financial year 2013-14, which could be even up to 24 per cent of this fiscal. While some ministries are reconciled to the anticipated budgetary cut by the Finance Ministry, a few others are protesting against about it.
According to indications to various ministries, the Finance Ministry would be slashing the annual budget of ministries in view of the poor financial health of the economy. 'The Finance Ministry and Planning Commission have said there will be a 24 per cent budget cut for all ministries,' a union minister told PTI.
While the Finance Ministry is headed by Harvard Business School alumnus P Chidambaram, who enjoys strong confidence of the United States government, Western multinational corporations (MNCs) and World Bank-International Monetary Fund (IMF)-World Trade Organisation (WTO) troika, the Planning Commission is headed by Montek Singh Ahluwalia, whose previous assignment was as a director with the IMF's Office of Independent Evaluation.
When contacted for his comments amid apprehensions of severe Budget cuts, Union Rural Development Minister Jairam Ramesh said that it is 'inevitable' and that his Ministry would have to make do with whatever it gets.
'A Budget cut is inevitable given the grim fiscal position. We have to make do with what we get,' he said.
Ramesh seemed to be reconciled even though media reports had suggested that he had written to Finance Minister P Chidambaram, requesting that there should be no cut in the Budget for his ministry.
The Rural Development Ministry was allocated a budget of Rs 85,000 crore during the current (2012-13) fiscal.
Tribal Affairs Minister V Kishore Chandra Deo refused to get into specifics but said that 'if such a huge cut' is done in the budget for a ministry like his, 'then hardly anything will be left for it'.
The Tribal Affairs Ministry was sanctioned a budget of approximately Rs 4,000 crore for the current financial year.
Deo said that there should not be any budget cut in the social sector ministries, keeping in mind the small size of their annual allocations.
'How much will you gain by cutting the Budget of the Tribal Affairs Ministry and others in the social sector, whose entire allocation is not too big. This way the ministries will not be able to meet their target of bridging the social gap,' he pointed out.
Deo has already written letters to Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia on the matter.
'I have written to Finance Minister P Chidambaram and Planning Commission Chief Montek Singh Ahluwalia over this and I think that on this area — the social sector — they should not cut the Budget so massively, he asserted.
The Women and Child Development Ministry too is bracing for a massive Budget cut, with a senior official saying that the Finance Ministry has already told them to spend only 33 per cent of the revised estimate for the last quarter of the current financial year.
The Defence Ministry suffered a cut of Rs 12,000 crore in the revised budget of Rs 1.93 lakh crore in the current fiscal.
Besides, its request for an additional Rs 40,000 crore in the current fiscal too was turned down by the Finance Ministry.
FOREX RESERVES UP BY $77 MN
India’s foreign exchange reserves increased by $77.6 million to $295.74 billion for the week ended Jan 27, according to RBI data. The reserves dipped by $580.3 million to $295.67 billion for the week ended Jan 18, 2013. The foreign currency assets (FCA), the biggest component of the forex reserves, went up by $79.3 million at $261.70 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI). The FCA were lower by $646.8 million at $261.62 billion in the previous week.
The RBI said that FCA in US dollar terms included the effect of appreciation or depreciation of non-US currencies held in reserve, such as the pound sterling, euro and yen. Gold reserves value remained the same at $27.21 billion. Reserves with the International Monetary Fund (IMF) went down by $0.2 million to $2.38 billion during the week under review. (IANS)
PLAN EXPENDITURE FACES SUBSTANTIAL DOWNSIZING
Seeking to restrict the country's fiscal deficit to 4.8 per cent of gross domestic product (GDP), the Finance Ministry is likely to make a substantial reduction in its Plan Expenditure for the 2013-14 financial year.
Finance Minister P Chidambaram has already committed to restricting the fiscal deficit for the current financial year to 5.3 per cent of gross domestic product and lower it further to 4.8 per cent of GDP next fiscal.
Sources said that the axe may fall on Plan Expenditure next year in order to restrict the fiscal deficit as per the road map under which it has to be lowered to 3 per cent by the financial year 2016-17.
The Finance Ministry, they said, will also scrutinise the utilisation of funds alloted in the current fiscal before releasing any amount for next year in the Budget, which is scheduled to be announced on 28 February.
According to data of the Controller General of Accounts (CGA), Plan Expenditure has been 56.8 per cent of the Budget estimates or about Rs 2.96 crore till December. However, non-Plan Expenditure has been 72 per cent of the Budget estimated at Rs 6.95 lakh crore.
Seeking to contain the fiscal deficit to 5.3 per cent of gross domestic product this year, the Finance Ministry has already asked all government departments to cap spending in the January-March quarter at 33 per cent of the total funds allocated for the full financial year.
'The restriction of 33 per cent and 15 per cent expenditure ceilings (in the last quarter of the current financial year and during the month of March respectively) is to be enforced both scheme-wise as well as for the demands for grant as a whole,' the ministry had ordered.
The government had hiked the fiscal deficit target for the current fiscal to 5.3 per cent of gross domestic product, up from the 5.1 per cent estimated in Budget.
The Government's fiscal deficit touched 78.8 per cent of the budget estimates (BE) in the first nine months of the current financial year (April-December 2012).
The rising subsidy bill and lower-than-expected revenue realisation has put pressure on government finances in the ongoing fiscal.
On the disinvestment side, the government has been able to raise just over Rs 10,000 crore so far against the target of Rs 30,000 crore for the entire 2012-13 fiscal year.
In November the government sought approval of the Lok Sabha for additional expenditure of about Rs 32,120 crore for this fiscal, mainly to meet the increasing oil subsidy bill and provide Rs 2,000 crore to the ailing Air India.
Of the total, Rs 28,500 crore will be used to compensate oil marketing companies (OMCs) on under-recoveries towards sale of subsidised petroleum products.
With the additional grant, the total funds earmarked for oil subsidy will soar to about Rs 72,260 crore in fiscal 2012-13.