Spooked by widening deficit,Centre issues new expenditure rules

Just three months into the fiscal and the Centres finances has already begun to show slippages with high levels of deficit,prompting the finance ministry to issue fresh expenditure guidelines

Just three months into the fiscal and the Centres finances has already begun to show slippages with high levels of deficit,prompting the finance ministry to issue fresh expenditure guidelines.

Official data released by the Controller General of Accounts on Tuesday revealed that the Centres fiscal deficit stood at 37.1 per cent at Rs 1,90,460 crore in the first quarter of 2012-13,as against the Budgeted Rs 5,13,590 crore. Though this is lower than the fiscal deficit of Rs 1,62,653 crore,which was nearly 40 per cent of the full fisc target between April-June 2011,it is a significant jump from the May 2012 figures of Rs 1,41,587 crore.

More worrying is the Centres revenue deficit,which has shot up to Rs 1,52,712 crore between April- June 2012 or 43.6 per cent of the full year target of Rs 3,50,424 crore. It was at lower at Rs 1,34,621 crore in the corresponding period last fiscal.

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The Reserve Bank of India in its policy review on Tuesday also warned of the threat to economic stability from the high levels of deficit. Financing the fiscal deficit from domestic savings crowds out private investment,thus lowering growth prospects, it has pointed out.

Between April-June 2012,the Centres total receipts stood at Rs 1,18,720 crore or a mere 12.7 per cent of the budgeted Rs 9,35,685 crore. Of this tax revenue,amounted to Rs 1,04,505 crore,non-tax revenue stood at Rs 14,215 crore. With non debt capital receipts at just Rs 2,402 crore,the Centres total receipts stood at Rs 1,21,122 crore.

Meanwhile,the Centres total spending amounted to 3,11,582 crore,which is 20.9 per cent of the full year target of Rs 14,90,925 crore. While plan expenditure amounted to Rs 86,221 crore,non plan expenditure stood at Rs 2,25,361 crore.

The finance ministry on Tuesday issued directives to all ministries,instructing them to send monthly expenditure plans and quarterly expenditure allocations for all demand for grants to the cash management cell. This would ensure better monitoring and expenditure management of government finances.

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