NEW DELHI: The finance ministry has told Parliament that the Centre’s thrust is on improving the quality of public spending, while strengthening the social security net for the poor and needy.
In the statement on deviation from the Fiscal Responsibility and Budget Management (FRBM) Act targets, the ministry also said that govt remained committed to pursue the glide path for fiscal consolidation and it will lower fiscal deficit to under 4.5% by next financial year.
It said since July, when the regular budget was presented, the global economic environment has become gloomier due to further escalation of conflict. “Given the prevailing global economic and security environment, it is necessary for govt to retain (a) fair degree of flexibility in conducting its fiscal policy so as to be able to respond to any fallout from adverse global events,” the ministry said in the nine-page document.
Pointing to the numbers on non-debt receipts, fiscal deficit and revenue deficit during the first half of the current financial year, the ministry said the numbers were within the limits prescribed under FRBM rules.
While revenue receipts (51.8% of budget estimates) were higher than the five-year moving average, total receipts (43.8%) of the govt were lower. Expenditure was also below the five-year moving average, resulting in the first half fiscal deficit being 29.4% of budget estimate against the five-year moving average of 63.8%.
The comment on the quality of expenditure ties in with govt’s efforts to focus on higher capex in recent years and cut on wasteful expenditure, besides targeting subsidies better. Even in the next budget, the Centre is expected to retain the emphasis on its spending pattern.