With tax receipts falling short of target, Govt’s FY19 spending seen at 97.5% of RE

With tax receipts falling short of target, the Centre might have spent about 97.5% of the FY19 Budget (revised estimate) of `24.57 lakh crore, leading to a spending compression of about `62,000 crore, sources said citing preliminary data.

The Centre’s capex would likely be about `3 lakh crore or 95% of the Budget target of `3.15 lakh crore, they added.

The spending compression were mainly due to lower spending on income support scheme for farmers, lower transfer to urban local bodies and on an average 1.5% saving from Budget allocations to various ministries, an official said.

Under the Pradhan Mantri Kisan Samman Nidhi (PM Kisan) scheme, the government could transfer only `6,000 crore to three crore farmers in March, against the target of `20,000 crore to about 12 crore farmers, resulting in a saving of `14,000 crore. Under the scheme, a sum of `6,000 per year would be disbursed in three equal instalments to small and marginal farmers having a cultivable land of 5 acre or less.

With urban bodies in some states, including Tamil Nadu, failing to hold elections, the Centre did not transfer about `12,000 crore during the last financial year. A sum of about `36,000 crore was saved across the ministries due to their inability to spend the entire amount allocated to them, the official said.

The Centre’s direct tax receipts are likely to fall short of the revised estimate (RE) by `35,000 crore in FY19 while shortfalls in indirect taxes would also be even higher. In this context, expenditure compression could help the Centre meet the fiscal deficit estimate of 3.4% of the gross domestic product (GDP) in FY19.

Courtesy : FINANCIAL EXPRESS