Govt Spends 30% of FY18 Bud­get in First Quar­ter

The Economic Times - - Economy: Macro, Micro & More - Our Bu­reau

New Delhi: The gov­ern­ment’s fast-paced spend­ing con­tin­ued in June, with over 30% of bud­get com­mit­ted for the year al­ready ex­hausted in the first quar­ter.

Cap­i­tal spend­ing in first quar­ter was pegged at 22.1% of the bud­get es­ti­mate, data re­leased on Mon­day showed, higher than 19.9% at the same time last year.

High ex­pen­di­ture that has fol­lowed early pre­sen­ta­tion of the bud­get has pushed fis­cal deficit well above the trend, but ex­perts are not sound­ing the alarm yet. At the end of June, fis­cal deficit was 80.8% of bud­get es­ti­mate com­pared with 61.1% at the end of June 2016. The gov­ern­ment has spent ₹ 68,328 crore of its ₹ 3.1 lakh crore­plus cap­i­tal bud­get by June, 39.4% more than the amount spend in the cor­re­spond­ing pe­riod last year.

To­tal re­ceipts added up to 13.1% of bud­get es­ti­mate com­pared with 12.8% last year, clearly suggest­ing that the higher fis­cal deficit is on ac­count of faster gov­ern­ment spend­ing at the start of the year.

Rev­enue deficit in first three months was 119.1% of the bud­get es­ti­mates, much higher than 79.6% in the pre­cious cor­re­spond­ing pe­riod. The gov­ern­ment had com­pleted the bud­get process be­fore the start of new fi­nan­cial year by ad­vanc­ing the bud­get pre­sen­ta­tion by a month. This has al­lowed a quick start to spend­ing, which was not the case ear­lier when the bud­get process spilled over to al­most first two months of new fis­cal.

The fis­cal sit­u­a­tion should cor­rect as rev­enues pick up and spend­ing evens out.

Tax rev­enues were marginally lower at 14.5% of bud­get es­ti­mate, against 14.9% in the ear­lier year, largely due to slow growth in ex­cise col­lec­tions on ac­count of dis­rup­tion due to the roll­out of goods and ser­vices tax.

Quick start to dis­in­vest­ment has pro­vided some sup­port to rapid spend­ing. The gov­ern­ment has al­ready raised about ₹ 8,000 crore against the bud­get tar­get of ₹ 72,500 crore.

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