Buoyed by better-than-expected performance on government finances’ front in 2010-11, the Centre today said it would keep a tab on public expenditure to ensure that Budget targets for this financial year too are achieved.
“Efforts to get the economy on the path of fiscal prudence are on track... The government is committed to achieve the fiscal targets,” an official statement quoting Finance Minister Pranab Mukherjee at a meeting of the Consultative Committee held yesterday said. He said to ensure that scarce resources of the country are productively deployed, “it is extremely important to measure outcomes.” In the Budget for 2011-12, the government had set fiscal deficit target at 4.6 per cent of the GDP and the revenue deficit target at around 3 per cent.
Now, the government has also started providing, along with the Budget and revised estimate of current year and Budget estimates of the ensuing year, the details of actual expenditure incurred on each scheme “for a better analysis of the budgetary provisions and the trend in expenditure”.
Mukherjee said the government had been able to contain the fiscal deficit and revenue deficit well within the revised estimates in 2010-11. It has been “possible due to higher tax collections as compared to revised estimates, higher receipts from non-tax sources and non-debt capital sources and savings under plan expenditure of the government”.
The government contained its fiscal deficit at 4.7 per cent of GDP during 2010-11, much lower than the revised estimate of 5.1 per cent, on the back of higher-than-expected realisation from auctioning of 3G and BWA spectrum.
The deficit finally stood at Rs 3,69,043 crore for the financial year ended March 2011, constituting 4.69 per cent of GDP at Rs 78,75,627 crore. This was 92 per cent of the revised estimate of Rs 4,00,998 crore, showing an improvement on the fiscal front.
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The Centre also cut its revenue deficit, an excess of the current expenditure over the current receipts, to 3.11 per cent of GDP against the projected 3.4 per cent.
It was lower than 3.2 per cent suggested by the 13th Finance commission in its road map.
At the Committee meeting, Mukherjee said the success of fiscal policy was closely tied with optimal utilisation of public resources. “Numerous factors make expenditure reforms an extremely challenging and uphill task. There is significant scope to reform the expenditure policy of the government for rationalisation of public spending,” he said.
While the government has taken several measures to ensure that public money is productively spent, members of the Consultative Committee said it was extremely important to prevent leakages in public spending in implementation of various social schemes such as MNREGA and Indira Aawas Yojna.
Some members said subsidy should be given only to “those who deserve it such as BPL families”. One member said storage of foodgrains be done only in those states where it was finally required. The Committee also expressed concern over delay in implementation of projects which leads to cost escalation.
Members felt small projects such as in irrigation be preferred compared to big projects that require heavy investments and get delayed also.