Govt May Impose More Spending Cuts To Curb Fiscal Deficit

A recent media report suggests that the government may impose more cuts on spending if tax revenues don’t improve. “We will review the situation around January by when the revised estimates for 2014-15 will be finalised. Also, there will be a more realistic estimate of revenue receipts by then. As of now, the fiscal situation seems under control,” two officials were quoted as saying.

Struggling to keep the increasing fiscal deficit under control, the finance ministry had imposed a cut of 10% in non-plan expenditure in October.

The ministry is under the process of finalising revised expenditure estimates for each ministry and department for the ongoing financial year.

Finance Minister Arun Jaitley has been aiming to achieve the fiscal deficit target of 4.1% of the gross domestic product (GDP) in FY2014-15.

“Right now the data we have is for just six to seven months of the fiscal. Traditionally, tax revenues tend to pour in towards the end of the financial year but collections have been low this year,” said a source.
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