Budget for Upcoming Fiscal Year Likely to Remain the Same
Upcoming budget plans reveal that the Centre is likely to maintain similar amounts of allocation for infrastructure sectors such as roads and highways with minor cuts in spending if necessary.
The newly formed government in May 2014 plans to keep expenditure allocations same for the coming fiscal year. A top source at the Infrastructure Ministry stated that though it might be possible to cut down on the expenditure on social infrastructure, the expenditure for physical infrastructure has to remain the same as much as possible because of its necessity to complete planned projects. The order of spending priorities too is likely to be maintained in the next budget which is due in February 2015.
Expected trends:
There will be certain spending cuts implemented on the social sector as the budget estimates have been pegged 15 per cent lower than the previous year. This is expected to hurt the social sector considering that the UPA government had built into the interim budget’s estimates 15 per cent across-the-board plan spending cuts.
The budget which was presented in on July 10th by the Union Finance Minister Arun Jaitley had retained most of the cuts that were previously implemented.
He had allotted a net amount of Rs. 80,043 crore as central plan outlay for the development of rural areas while another Rs.51828 crore was assigned to the school education and literacy. Secondary and higher education sectors were allotted an amount of Rs.8579 and Rs.16900 crore respectively.
Rs.30, 645 was allocated to the Department of Health and Family Welfare.
Analysts predict that by the time the next budget is announced, rates of both inflation and GDP growth this year will most likely be lowered than expected.
Fiscal deficit Target:
Having announced his budget plans, Mr. Jaitley also stated a fiscal deficit target at an estimated 4.1 per cent of Gross Domestic Product (GDP) for the year in the budget. A 13.4 per cent growth had been assumed in the ‘nominal’ GDP as per calculations estimates.
The Ministry has projected that tax collections will miss the budget target.
It has been suggested that in order ensure that the fiscal deficit remains within the set target, expenditure must be curbed in certain sectors that raise funding from non-tax revenue sources such as disinvestment proceeds.
Source: The Hindu
Department of Health and Family Welfare, finance minister Arun Jaitley, Infrastructure Ministry, infrastructure sectors, roads and highways sector, UPA government
