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Improved quality of public expense stoking growth: Finance ministry

business Updated: Feb 20, 2016 21:37 IST
Capital expenditure

Finance minister Arun Jaitley interacts with finance secretary Ratan Watal at the pre-budget consultative meeting.(HT File Photo)

Finance ministry on Saturday said that the quality of government expenditure has improved significantly in the current fiscal and is resulting in high growth.

“In the current fiscal our capital expenditure which goes into asset creation has seen a significant growth as against revenue expenditure which goes into salary payment and rent... This has happened after a gap of many years... This may also be a reason why we are recording a high growth,” finance secretary Ratan P Watal said.

Economic growth in the current fiscal is estimated at 7.6%, highest in the last five years.

“Quality of expenditure has also improved this fiscal. The revenues that we are getting and expenditure that we are incurring are in tandem. So, basically we are moving as per plan,” he said in the ministry’s YouTube channel.

The Plan Expenditure during April-December showed significant improvement. According to CGA data, it was 74.4% of budget estimate at the end of December, as compared to 61.3% a year ago.

The improvement was more significant with regard to plan expenses on capital account. It was 85.3% of BE at the end of December as again 57.9% a year ago. The government aims to reduce fiscal deficit to 3.9% of GDP in current fiscal, from 4% last fiscal and as per roadmap it aims to bring it down to 3.5% in 2016-17.

“Expenditure management has been on track in the current fiscal. The world is going through turbulent time. The growth rates are low globally. Among BRICS countries only India is standing out because our macro economic indicators are strong. We are trying to further strengthen it,” Watal said.