The government has cut expenditure by about Rs 40,000 crore from the revised estimate (RE) level to achieve the fiscal deficit target of 3.5 per cent in 2016-17, the Controller General of Accounts reported on Wednesday.
The Centre’s fiscal deficit stood at Rs 5.35 lakh crore, or 3.51 per cent of GDP, in FY17, marginally higher than the revised estimate of Rs 5.34 lakh crore.
After transfers to states, the tax revenue stood at Rs 11.02 lakh crore, or 101.2 per cent of the RE, in FY17. Total revenue stood at Rs 14.4 lakh crore, or 97.3 per cent of the RE, of Rs 14.8 lakh crore. The total expenditure in the last fiscal year was Rs 19.75 lakh crore, or 98 per cent of the RE of Rs 20.14 lakh crore, according to the CGA data.
The Plan expenditure was cut from Budget estimate (BE) level to meet deficit targets, the spending was actually Rs 11,699 crore less than the RE of Rs 5.84 lakh crore. Under the Plan spending, the capital spending got a boost though. Overall (Plan and non-Plan) capital spending rose by 4 per cent to Rs 2.9 lakh crore in FY17 from the RE level of Rs 2.8 lakh crore. Year-on-year, 23 per cent increase in capital spending has helped the economy grow 7.1 per cent in the last fiscal year, despite headwinds to growth.
However, the GDP data released separately by the Central Statistics Office said despite the augmented government spending, the gross fixed capital formation came down to 27.1 per cent of GDP in FY17 from 29.3 per cent of GDP in the previous year as private investments remained tepid. FE