Rs 1,000 Cr Grants Demand Soon

The government will move a supplementary demand for grants for Rs 1,000 crore in the next few days to meet the overrun in expenditure so far this year.

The problem has been aggravated by a slowdown in tax collections. Indirect tax collections in November declined to Rs 7,349 crore, down 2.2 per cent from the same month a year ago. The marginal rise in excise receipts was more than offset by the decline in customs accruals.

However, in cumulative terms, indirect tax collections between April and November were 3.63 per cent higher at Rs 56,394 crore than collections recorded in the same period in 1997-98.

 

According to the latest available provisional data, excise collections up to the end of November were up by 6 per cent_compared with the full-year target of 21 per cent_to Rs 30,424 crore in the period April-November (as compared to the same period in 1997-98). In the case of customs, there was a decline of 3 per cent (as compared to the full-year target of 17 per cent) at the level of Rs 24,969 crore. The additional expenditure has arisen largely on account of the funds the ministry has had to generate to meet commitments on fertiliser subsidies (after the minister had to rollback budget pronouncements), higher defence payments (on account of the depreciation of the rupee) and enhanced pension payments (due to the implementation of the Fifth Pay Commission's recommendations).

Senior government officials explained that this was a cash-outgo supplementary as compared to the contingency supplementary moved in 1997-98 after the United Front government had tendered its resignation. The supplementary is awaiting the president's assent, before being moved in parliament, sources said.

The overrun in expenditure -- pegged in the budget at Rs 267,927 crore -- has come as yet another signal that the fiscal deficit target of 5.6 per cent of gross domestic product in 1998-99 has come under pressure. Already, the finance ministry is under pressure with revenues expected to fall short by Rs 10-12,000 crore and the disinvestment process unlikely to realise the targeted sum of Rs 5,000 crore.

A concept paper prepared by the government on the fiscal status reports that the government has been left with little room for manoeuvre in 1998-99. Officials argue that a political consensus will have to be forged if the government is to stick to a sustainable level of fiscal deficit. The finance minister had at the recently concluded World Economic Forum indicated that the BJP-coalition was striving to obtain consensus to reorder several segments of government expenditure with the basic objective of achieving a fiscal deficit of 3 per cent of GDP.