'Plan spend of six ministries was cut'

FinMin urges reduction not be weighed against Budget estimates

Amid criticism that it trimmed expenditure indiscriminately to achieve fiscal targets, the finance ministry today said the Plan expenditure of six major ministries - communications and IT, health and family welfare, home, power, rural development, and textiles - were cut, compared to revised estimates (RE) in 2012-13.

These ministries accounted for Rs 1.01-lakh-crore expenditure under the Plan head in the RE, a little less than 25 per cent of Rs 4.29 lakh crore for 2012-13.

The government was blamed for squeezing Plan expenditure of various ministries and departments. Plan expenditure stood at Rs 4.14 lakh crore in 2012-13, which was 3.5 per cent lower than Rs 4.29 lakh crore in the RE.

So, Rs 15,000 crore (difference of RE and actual) was cut for these six ministries for 2012-13.

Finance Minister P Chidambaram said yesterday that the government would focus on raising revenues to bring down deficit to below 4.8 per cent of the GDP in the current financial year.

"I don't wish to compress expenditure; therefore revenues have to go up. For 2013-14, (we) have to do much better than 4.8 per cent," he had said.

In the statement, the finance ministry gave figures for effective revenue deficit as well. It showed that effective revenue deficit was cut to 2.5 per cent of the GDP in 2012-13 against the RE of 2.7 per cent. In the current financial year (FY14), it is projected to come down to 1.8 per cent.

Effective revenue deficit is calculated by taking away those expenditure from revenue deficit, which is taken as current expenditure but leads to capital asset creation.

The finance ministry was able to rein in its revenue deficit at 3.6 per cent of GDP against 3.9 per cent estimated in the RE. For the current financial year, it is pegged at 3.3 per cent.

So far as overall fiscal deficit is concerned, the government controlled it at 4.9 per cent of GDP, lower than 5.2 per cent in RE and even less than 5.1 pegged in BE. In fact, it moved closer to the target set for FY14 at 4.8 per cent.