Finance ministry seeks explanation from others on underspent funds

The finance ministry, which has begun pre-Budget preparations and is finalising revised estimates for 2017-18 after discussions with various ministries, has asked departments which have underspent for an explanation. These departments may not receive additional sums in the upcoming winter session supplementary demand for grants, and their budgetary allocations for 201819 may also be affected.

Among the bigger ministries, telecom and power have badly underspent, Business

Standard has learnt from senior government sources. While the Centre’s April-September total expenditure was ~11.5 lakh crore, about 54 per cent of the full-year budgeted estimates of ~21.46 lakh crore, the telecom and power ministries are learnt to have spent less than 40 per cent of their allocations.

“We have sought an explanation from these departments on why they have not been able to spend the allocated sums. They will be told to spend that amount before any additional allocation is provided under supplementary demand for grants,” said a senior official. “How their underperformance in utilising allocations affects the budgetary support next fiscal year depends on a number of factors, and is something we are looking at,” the official said.

For 2017-18, the budgeted total expenditure of the ministry of communications is ~36,237 crore, while that of the ministry of power is ~13,881 crore. The Medium Term Expenditure Framework projects the central government’s expenditure three years in advance. To maintain fiscal discipline, the finance ministry advises that any deviation from the expenditures projected for various departments be avoided. “The budget estimates of the ministries shall conform to the projections contained in the MTEF Statement and there shall not be any deviations from the MTEF projections,” this year’s Budget circular has stated. Hence, it is now the practice that if a department or ministry is not able to spend the allocated amount, there may be a reduction in the upcoming fiscal year’s allocations.