Himachal: fiscal, revenue deficit to drop despite higher non-plan spending
Even as the state’s fiscal health continues to deteriorate, the latest estimates on the government’s compliance under the Fiscal Responsibility & Budget Management Act shows a decline in the fiscal and revenue deficit in the wake of increased grants for centrally sponsored schemes despite a rise in non-plan expenditure.punjab Updated: Feb 17, 2015 23:25 IST
Even as the state’s fiscal health continues to deteriorate, the latest estimates on the government’s compliance under the Fiscal Responsibility & Budget Management Act shows a decline in the fiscal and revenue deficit in the wake of increased grants for centrally sponsored schemes despite a rise in non-plan expenditure.
However, non-plan expenditure is likely to go up by Rs. 204 crore due to committed liability under grants-in-aid, other charges and vehicle, travel and office expenses.
In the budget estimates non-plan expenditure was expected at Rs 17,646 crore while the latest estimates hinted at an increase of Rs. 204 crore and non-plan expenditure for the current fiscal is now projected at Rs. 17,851 crore, though the government had said the medium-term fiscal policy would focus on cutting down of all unproductive spending.
However, the latest estimates have predicted a low fiscal and revenue deficit. The budget estimates for FY2014-15 had projected a revenue deficit at Rs. 3,261 crore while the latest compliance under rule 7 of the Himachal Pradesh Fiscal Responsibility & Budget Management Rules, 2005 has shown the expected revenue deficit to decrease by Rs. 448 crore to Rs. 2,812 crore.
The fiscal deficit is now expected to fall to Rs. 5,084 crore while in the budget it was pegged at Rs. 5,354 crore. The budget estimates had estimated the fiscal deficit percentage at 5.74 while the revised estimates have projected it lower at 5.45% of the GSDP, that is Rs. 93260 crore.
Although there has been no change in the tax and non-tax revenue collection target central government transfers including central taxes have increased by Rs. 542 crore. The latest estimates have pegged central transfers at Rs. 9,997 crore while in the budget document presented in February last year it was estimated at Rs. 9455 crore.
Since central government grants have increased, expenditure under centrally sponsored schemes has also risen from the projected figure Rs. 326 crore to Rs. 1,174 crore, according to a document tabled at the recent winter session of the state assembly. The latest estimates have also hinted at an increase in non-plan and plan expenditure.
In the wake of more funds under centrally sponsored schemes, expenditure under this head is expected to rise from Rs. 326 crore, as expected earlier, to Rs. 1,174 crore. With an increase in capital expenditure under the head of centrally sponsored schemes, capital surplus. which was expected at Rs. 954 crore in the budget, is now projected to decrease to Rs. 776 crore.