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The Finance Ministry has asked all the Central Ministries and Department to restrict their expenses within the Revised Estimate (RE). This is critical to achieve the fiscal deficit, as announced in the budget for Fiscal Year 2021-22.
The government has set a fiscal deficit target of 6.8 per cent of GDP or over ₹15.06 lakh crore in FY22. SBI, in its latest report, has said that considering the projection of bigger size of economy, absolute number for the deficit is expected to go up to ₹15.80-lakh crore but in terms of percentage of GDP, it will remain same at 6.8 per cent.
“All the ministries and departments have been requested to contain the expenditure within the approved Revised Estimate ceilings,” an office memorandum issued by the Economic Affairs Department said. This is part of the communication seeking proposals for the third and final batch of Supplementary Demands for Grants.
Though Revised Estimate number for each of 55 Central Ministries under 101 Demands for Grants has already been communicated, but that will not be made public till Budget is presented on February 1. It may be recalled that Budget provides allocation for each of the Ministries and Departments for coming fiscal year, which is called Budget Estimate (BE). Then these numbers are revised and included in next year Budget as Revised Estimate which could be less or higher than BE. During Fiscal Year 2020-21, allocations were cut under 67 demands for grants and that helped the government lower the fiscal deficit by over ₹2-lakh crore or restrict to 9.5 per cent of GDP.
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Ministries hopeful for higher capital expenditure provision in FY23 BudgetAccording to Office Memorandum, while processing proposals for supplementary grants, the grant-controlling authority must invariably identify savings available within the grant so that the infructuous or inflated supplementary demands are weeded out and the eventuality of surrender after obtaining supplementary grant is avoided. “The proposal for Supplementary Demands for Grants may be projected after a thorough and objective assessment of additional requirements of funds,” it said.
Demand proposal
The memorandum further said the demand proposal should be made after a thorough review of savings within the Grant. “In cases where re-appropriation can be made without the requirement of Supplementary as per the extant provisions, no Supplementary proposal, including for a token amount, should be proposed. Such requirement may be met by re-appropriation of savings after obtaining approval of competent authority,” it said.
The cases that will be eligible to be incorporated under such demands include those where advances from the Contingency Fund of India have been granted. Besides, payments against court decree will be included as well in cases where the finance ministry has specifically advised moving of supplementary demand in the Budget session, it said.
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