Despite concerns over its fiscal consolidation plan, the finance ministry is hopeful of meeting its deficit targets through savings in its subsidy bill.
“Roll out of the Food Security Act has been deferred by three months. So actual expenditure on the food subsidy will be only for seven months although we have made allocations for a full year,” Arvind Mayaram, finance secretary told The Indian Express.
The Union Budget 2014-15 has allocated Rs 1,15,000 crore as food subsidy as against Rs 80,000 crore in FY14. Apart from the delayed roll out of the Act, Mayaram said, “We have a lot of cushion in expenditure as we have budgeted additional Rs 35,000 crore as food subsidy this fiscal.”
Private analysts and rating agencies have raised concerns over the Centre’s fiscal consolidation roadmap that envisages a fiscal deficit of 4.1 per cent of the GDP, with a near 13 per cent hike in total expenditure at Rs 17.93 lakh crore as well as partially higher subsidy bill of Rs 2.51 lakh crore.
Tax revenues are estimated to rise by a buoyant 19.8 per cent to Rs 13,64,526 crore in the current fiscal.
The finance secretary was also optimistic of the Budget’s allocation of Rs 63,426.95 crore as fuel subsidy. “Oil is a big risk due to the crisis in Iraq as well as concerns over Israel and Hamas. But most pundits have predicted that oil prices will not be rising,” he said.
- Home Minister Rajnath Singh Assures Safety Of All Tourists Stranded On Havelock Island
- Government To Waive Service Tax On Debit, Credit Card Transactions Of Up To Rs 2,000
- President Pranab Mukherjee Criticises Parliament Disruptions Over Demonetisation
- Pakistan International Airlines Flight Carrying Over 40 Passenger On Board Crashes
- Shah Rukh Khan On Raees Clash With Kaabil: It’s Impossible To Have A Solo Release In India
- US-President Elect Donald Trump Named TIME’s Person Of The Year 2016
- O. Panneerselvam: 10 Things You Need To Know
- PM Narendra Modi Slams Opposition For Not Letting Parliament Function
- Nawazuddin Siddiqui On Working In Raees: Was Nervous To Shoot With Shah Rukh Khan
- Bathinda Dancer Murder: Video Showing Accused Opening Fire At Marriage
- 5 Lesser Known Facts About Sasikala Natarajan
- Congress Leader Shashi Tharoor’s Delhi Home Burgled: Here’s What Happened
- Reserve Bank Of India Keeps Repo Rate Unchanged Post Demonetisation
- Bigg Boss 10 Dec 06 Review: Swami Om Pees In Kitchen
- Lenovo k6 Power Video Review
For calculating the Budget Estimates, the finance ministry has taken global crude oil prices at $110 per barrel and the value of the rupee at 61 against the US dollar.
“But crude oil prices in the international markets are ranging at $108 a barrel today while the rupee has gone down below the 60 level. All this will help us meet our targets,” said Mayaram, adding that even if there is a marginal shortfall in the revenue, it will be met by this cushion on the expenditure front.
However, the finance ministry is also extremely upbeat about its targets for tax collection and is hoping for higher tax buoyancy as the economy revives.
While the tax to GDP ratio was 10.1 per cent in FY14 when GDP grew by 4.7 per cent, the Budget has pegged the tax to GDP ratio at 10.6 per cent this fiscal with a growth rate of 5.4 per cent to 5.9 per cent. “On the current analysis the numbers are absolutely credible,” the finance secretary said.
However, global rating agencies had questioned the Budget numbers. “We are surprised the Budget has stuck with the outgoing government’s fiscal consolidation path. The revenue measures that were announced today actually have the net effect of reducing revenues by 0.1 per cent to 0.2 per cent of GDP,” said Fitch in a statement on Thursday.