The comparatively better expenditure numbers at the end of the first half of this fiscal are expected to favourably impact the first Budget Estimate for the next fiscal year.

Thirty four ministries and departments have spent more as a percentage of BE than in the last fiscal. Besides, borrowings for the whole fiscal are expected to be lower than the BE.

Overall expenditure

However, overall expenditure is yet to cross the halfway mark of BE.

About 21 of the 55 Central ministries and departments have spent less as a percentage of BE in the six months period compared to last fiscal. If the present trend continues, it will have a positive impact on the cash balance and fiscal deficit of the Centre, experts say.

According to Controller General of Accounts (CGA) data, the overall expenditure crossed ₹16.26-lakh crore compared to ₹34.83 lakh crore proposed in the BE. In percentage terms, it is 47 per cent of BE against 49 per cent during the corresponding period of last fiscal.

While revenue expenditure (around ₹14-lakh crore) is 48 per cent of BE against 50 per cent last fiscal, capital expenditure (over ₹2.29 lakh crore) is 41 per cent of BE against 40 per cent.

According to a senior government official, the overall expenditure is below the halfway mark in the first half, though the situation is a little better than July, when the total expenditure was less than a third of the BE.

“A big push to expenditure in August and September and lifting of expenditure curbs on 82 out of 101 demand days before end of second quarter helped improve overall numbers,” he said.

“This will have an impact on expenditure numbers for the next fiscal,” said the official, because “normally, the first estimate for the next fiscal is based on the expenditure trend of first six months of this fiscal and the revised estimate is based on expenditure till November.” This means one can expect an improvement in the estimate.

Spending patters

Expenditure pattern shows petroleum, power, agriculture, consumer affairs and health ministries among those lagging in terms of expenditure, while chemicals & fertiliser, defence, home and road ministries showed improved performance.

Government officials and experts say that if the present trend continues, along with buoyancy in revenue collection, the Centre’s cash balance at the end of current fiscal year is expected to be the same as at the beginning.

‘On a strong wicket’

Devendra Kumar Pant, Chief Economist with India Ratings & Research, said the government still maintains a ₹1.81-lakh crore surplus cash balance with the RBI as of end-September 2021, against ₹1.82-lakh crore at the end of March.

“With such a huge cash surplus with the RBI, the Government is on a strong wicket to either improve expenditure or reduce market borrowing,” he said while expecting at least 20 basis points reduction in the fiscal deficit estimated at 6.8 per cent of GDP in the Budget.

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