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A day before the election results will be announced, finance minister P Chidambaram will meet financial advisers of various ministries on Thursday, to discuss ways to curb wasteful expenditure and keep the fiscal deficit within the budgeted target of 4.1 per cent this year.
As he is likely to resign on May 17 to make way for the next finance minister, the exercise would not have much repercussion. The new government might take a fresh look at the Budget Estimates (BE) for 2014-15 in the Budget to be presented in late June or early July.
“The finance minister will meet financial advisors to take stock of their spending plans,” said a finance ministry official who did not wish to be identified.
The ministry is encouraging government departments to start spending their money from the beginning of the year itself, instead of bunching it towards the end of the year. In that scenario, the finance ministry will have to cut the Plan Expenditure in the revised estimates (RE), as it did in the past two years.
The meeting will also be attended by finance secretary Arvind Mayaram and expenditure secretary Ratan P Watal. Financial advisers play a crucial role in controlling spending and report directly to the expenditure secretary in the finance ministry.
Officials said the BE for Plan expenditure are likely to be increased, as retaining it at last year’s level was not feasible, although non-Plan spending might be retained at more or less the same level (interim Budget BE), as there is no significant scope to cut it.
In the interim Budget, Chidambaram had pegged total expenditure for this year at Rs 17.63 lakh crore, a 10.8 per cent increase over the revised estimate of 2013-14. Plan expenditure was kept at Rs 5.55 lakh crore. In the revised estimate for 2013-14, Plan expenditure was cut drastically by Rs 79,790 crore, 14.4 per cent lower than the BE of that year. From the RE of 2012-13, Plan expenditure pegged for 2013-14 represented an increase of 16.8 per cent.
The finance ministry is not likely to seek fresh proposals from other ministries and departments while finalising estimates for the full Budget. It had already received proposals in this regard for the interim Budget and these will be used for the full Budget. However, the new government might do some maneuvering within this.
