Cut in expenditure
When P Chidambaram passes on the reins of the finance ministry to his successor, he might do so with the government's fiscal deficit for 2013-14 at 4.5 per cent of gross domestic product (GDP), lower than his revised estimate of 4.6 per cent, thanks to the Election Commission's code of conduct for the Lok Sabha elections.
As the code of conduct came into force on March 5, many ministries were unable to use the funds allocated to them, resulting in much-needed savings for the government.
The cut in expenditure not only made up for a shortfall of about Rs 6,000 crore in total revenue, but also left the exchequer with enough funds to cut the fiscal deficit further.
On condition of anonymity, a finance ministry official said, "There is a shortfall of about Rs 12,000 crore in tax collections. But as we got Rs 6,000 crore extra in non-debt capital receipts, the net revenue loss is only Rs 6,000 crore.
That will be offset by savings in expenditure; we may still have Rs 6,000 crore more than the revised estimate. So, the fiscal deficit could fall to 4.5 per cent."
Text: Vrishti Beniwal, Business Standard
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