Though the Centre's fiscal consolidation story is taking a hit, Plan expenditure is likely to provide some respite. In the Budget, expected to be tabled by mid-March, the Plan expenditure is likely to be scaled down in the revised estimates for 2011-12, compared to Budget estimates.
"The revised estimate for Plan expenditure is expected to show a fall, compared to Budget estimates," officials told said.
The expenditure was pegged at Rs 4.4 lakh crore in the Budget estimate for the current financial year. However, this is an area in which the government has shown some control, as far as fiscal deficit is concerned.
The Plan expenditure till December was less than last year's, as a portion of Budget estimates. It stood at Rs 2.8 lakh crore, 62.7 per cent of the Budget estimate, against 67 per cent in the corresponding period of the previous financial year.
In absolute terms, it rose just 10.4 per cent against Rs 2.50 lakh crore in the first nine months of the previous financial year.
Non-Plan expenditure was Rs 6.2 lakh crore, 75.9 per cent of the Budget estimate, against 73 per cent in the year-ago period.
However, this expenditure may rise further beyond the Budget expenditure because of the subsidy burden. The government has already secured the Parliament's nod for an additional Rs 65 lakh crore of expenditure, owing to the rising subsidies on oil, fertiliser and food fronts.
Year-on-year, non-Plan expenditure rose 15.3 per cent, compared with Rs 5.4 lakh crore till December.
The Centre's fiscal deficit has touched 92 per cent of the Budget estimate in just nine months. The government has already admitted it would not be able to rein in fiscal deficit at 4.6 per cent of the gross domestic product, as was projected in the Budget.
Estimations of the revised fiscal deficit vary, but most economists and finance ministry officials say it might increase by a percentage points as a proportion of the gross domestic product.
The Centre's tax receipts stood at Rs 4.20 lakh crore till December, 63.3 per cent of the Budget target for the entire financial year. In the corresponding period of the last financial year, it stood at 73.2 per cent.
Finance ministry officials are confident of meeting the indirect tax collection target this financial year, but direct tax mop-up may face a shortfall of Rs 15,000-20,000 crore (Rs 150-200 billion), compared to the Budget estimate.
However, the real impact on fiscal deficit is from non-tax receipts and non-debt capital receipts. Sale of telecom spectrum helped the government garner Rs one lakh crore in 2010-11, against the budgeted Rs 35,000 crore (Rs 350 billion), while non-tax receipts stood at 130.4 per cent of the Budget estimate.
However, this time, these stood at just Rs 78,077 crore (Rs 780.77 billion), 62.2 per cent of the Budget estimate. Non-debt capital receipts were worth just Rs 16,858 crore (Rs 168.58 billion), 30.6 per cent of the Budget estimate, against 69.4 per cent in the first nine months this financial year.
Budget 2012-13 is likely to re-classify expenditure into Plan and non-Plan categories. "The Union Budget for 2012-13 is likely to see a shuffling of about 10 non-Plan expenditures into planned ones to enable the finance ministry to raise its annual Plan spend," officials said.
The objective, officials said, was to enable the government to meet its non-planned expenditure target for 2012-13, which would rise due to the Food Security bill.
Last year, four programmes of the government, a part of the non-Plan expenditure, were shifted to the Plan expenditure side. In the next financial year, a few programmes of the external affairs ministry are likely to be moved from non-Plan to planned ones.
