The government will stick to its fiscal deficit target of 3.5% of GDP for 2016-17, despite Rs 14,786 crore of extra spending, a senior finance ministry official said on Friday, as black money schemes have helped in shoring up revenues that will now be ploughed back to social schemes.
On Friday, finance minister Arun Jaitley sought Parliament’s approval for the third and final batch of Supplementary Demands for Grants entailing an additional expenditure of Rs 11.35 lakh crore for the current fiscal year ending March 2017.
However, the net cash outgo or extra spending will be only Rs 14,786 crore. The rest will be matched by savings of the ministries and enhanced receipts from taxes.
“Given the higher tax collection from Income Disclosure schemes, the additional spending will be easily be funded without widening the fiscal deficit,” a finance ministry official told Hindustan Times on conditions of anonymity.
The Finance Ministry has sought House nod for spending an extra Rs 3,293 crore for payment of arrears towards 7th Pay Commission award and One Rank One Pension (OROP).
The government will also spend Rs 3,843 crore more for fertiliser subsidies, Rs 1,504 crore for promotion of SME sector and another Rs 3,000 crore for assisting states affected by natural calamities and Rs 782 crore for funding the Pradhan Mantri Gramin Awas Yojana..
The government has sought Parliament nod for transferring of Rs 5,203 crore from Krishi Kalyan cess to Krishi Kalyan Kosh and also for the transfer of Rs 5,889 crore of unclaimed money to Senior Citizen Welfare Fund.
In his Budget presented on February 1, Jaitley projected fiscal deficit at 3.2% for 2017-18, as compared with 3.5% for 2016-17.
The government has increased allocations for social schemes including rural job scheme MGNREGS, roads and irrigation infrastructure to spur economic activity at the hinterland.