Finance Minister Arun Jaitley has delayed the fiscal consolidation road map set in the Fiscal Responsibility and Budget Management Act by a year.
The Budget presented on Saturday estimates the fiscal deficit at 3.9 per cent of the gross domestic product in 2015-16, as opposed to the 3.6 per cent proposed in the earlier roadmap, earlier. By delaying the fiscal consolidation by a year, Jaitley projects the deficit to be gradually brought down to 3.5 per cent in 2016-17 and to three per cent in 2017-18. The fiscal deficit is now budgeted at Rs 5,55,649 crore in 2015-16, about Rs 43,000 crore higher than the revised estimate for 2014-15..
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The rationale behind postponing fiscal consolidation is to “maintain a fine balance between the need to continue with policy of fiscal rectitude to provide sufficient space for monetary policy easing on one hand, the need to adequately provide for social and welfare programmes and to increase public spending in core sectors to give a fillip to growth”.
Thus, outlays for both roads and railways have been increased by Rs 14,031 crore, and Rs 10,050 crore, respectively, with total investment in infrastructure going up by Rs 70,000 crore in 2015-16 over 2014-15 from the Centre’s funds and resources of Central public sector enterprises.
On the revenue front, total tax revenue to the Centre is now projected to grow to Rs 9,19,842 crore in 2015-16, up from the revised estimates of Rs 9,08,463 crore in 2014-15. Non-tax revenue is budgeted to go up marginally to Rs 221,733 crore in 2015-16 from Rs 2,17,831 crore in 2014-15.
Total expenditure is budgeted to go up to Rs 17,77,477 crore in 2015-16 from the revised estimate of Rs 16,81,158 crore in 2014-15. Of this, non-Plan expenditure is estimated to go up by roughly Rs 1 lakh crore, with Plan expenditure budgeted at the same level as the revised estimated for 2014-15.