With the Food Security Act likely to put a huge pressure on India’s fiscal deficit, several schemes announced by finance minister P Chidambaram in this year’s Budget may not see the light of day.
The government, which adopted a new fiscal consolidation path in September 2012, has set a fiscal deficit target of 4.8% of GDP for 2013-14. Chidambaram had underlined the need to adhere to the projected target and not breach it at any cost, sources said.The government has asked all ministries and departments to cut non-plan expenditure by 10% while announcing fresh measures to cut down unproductive expenditure including the creation of new posts, holding meetings in five-star hotels and restricting foreign travel by officials.
“The government could relook at all schemes and expenditures that would be attached to these and a decision needs to taken on which ones need to be prioritised, though no decision has been taken on this as yet,” an official told HT.
“The adjustment of the food subsidy in the near future may also imply a downward restructuring of the fuel subsidy,” said Soumya Kanti Ghosh, chief economic adviser, SBI.