Budget 2013: Total expenditure raised toRs.16.

65 trillion for FY2014

Chidambaram says the total Plan and non-Plan expenditure this year was 96% of the budgeted figure

The allocation for defence next year is Rs.2.03 trillion, of which Rs.86,741 crore is for defence capital expenditure.

New Delhi: Finance minister P. Chidambaram proposed an almost 12% increase in expenditure in the coming fiscal although he emphasized the need to curtail spending to pare a high fiscal deficit. Chidambaram estimated total spending in the year starting 1 April at Rs.16.65 trillion, against the Rs.14.9 trillion that was budgeted for the current fiscal. Out of this, Rs.5.55 trillion was earmarked for plan expenditure, compared with the Rs.5.21 trillion initial estimate in the previous budget, out of which the government is likely to spend just under Rs.4.3 trillion. This under-spending on plan expendituremoney spent by the government on productive asset creationmay signal a bid by the government to keep the fiscal deficit closer to the projected targets, says N.R. Bhanumurthy, a professor at New Delhi-based National Institute of Public Finance and Policy.

The fiscal deficit for the year to 31 March will be 5.2% of gross domestic product, as against last years projection of 5.1%. Midway through the fiscal, the government revised its projection to 5.3%. Chidambaram has projected a fiscal deficit of 4.8% for 2012-13. In the budget for 2012-13, the estimate of plan expenditure was too ambitious and the estimate of non-plan expenditure was too conservative. Faced with a huge fiscal deficit, I had no choice but to rationalize expenditure. We took a dose of bitter medicine. It seems to be working. We also took some policy decisions that had been deferred for too long, corrected some prices, and undertook a review of certain tax policies, Chidambaram said in his presentation in Parliament. Planned expenditure is a function of how much the government hopes to get on the revenue side, said Bhanumurthy. An economic slowdown affects revenue generation, so the finance minister wants to keep his planned spending in check, which, in turn, helps contain the fiscal deficit, something that appeases credit rating agencies. Laxity in clearances given to several schemes and projects is actually a blessing in disguise for the government keen to meet its fiscal deficit target, Bhanumurthy said. The finance minister has also reduced the number of centrally sponsored schemes from 170 to 70, in line with the recommendations of a committee set up under former cabinet secretary and Planning Commission member B.K. Chaturvedi. Chidambaram set aside Rs.11.09 trillion for non-plan expenditurethe amount that goes towards defence subsidies, interest payments and salariescompared with the Rs.9.69 trillion that was budgeted for this fiscal. The actual non-plan expenditure this year will likely be Rs.10.01 trillion. A bulk of the increase in the non-plan expenditure has come on account of spiralling food, petroleum and fertilizer subsidies, as was the case last year. In the last budget, although the government allocatedRs.1.79 trillion towards subsidies, it ended up spending close to Rs.2.48 trillion. The government now intends to spend Rs.2.20 trillion on subsidies, a figure closer to the actual expenditure of Rs.2.11 trillion in 2011-12. Out of this, at Rs.90,000 crore, food subsidy gets the biggest share, modestly up from this years spend of Rs.85,000 crore. Apart from this, Chidambaram has set aside an additional Rs.10,000 crore, keeping in view plans to enact the food security legislation, for which the government has sought parliamentary approval. Chidambaram has budgeted for a fertilizer subsidy of Rs.65,971 crore, marginally short of last yearsRs.65,974 crore. However, holding its petroleum subsidy estimate of Rs.65,000 crore could be tricky for the government, which spent more than double the budgeted amount in the year to March on subsidizing diesel, kerosene and domestic cooking gas bottles.

Although there was a budgetary allocation of Rs.43,580 crore to subsidize petroleum products, the figure rose to Rs.96,880 crore. In a post-budget press conference, Chidambaram said that since the government had capped the number of domestic gas cylinders at nine per household a year, and had partially freed diesel prices, the subsidy allocation should hold. The allocation for defence next fiscal is Rs.2.03 trillion, of which Rs.86,741 crore is for defence capital expenditure. Last year, while the government had budgeted for Rs.1.93 trillion to be spent on defence, it only spent Rs.1.78 trillion. The finance minister allocated Rs.74,477 crore for rural development, out of which Rs.33,000 crore has been set aside to be spent on the rural jobs guarantee programme, which ensures 100 days of employment to all poor, rural households. This year, the government will spend Rs.52,045 crore on rural development. Chidambaram has also allocated Rs.27,049 crore to the farm ministry. In the next fiscal, the government will spend Rs.52,701 crore and Rs.26,750 crore on school and higher education, respectively. The minister announced that the urban renewal mission was being continued in the 12th Five-Year Plan with an allocation of Rs.14, 873 crore. Chidambaram gave Rs.37,330 crore to the health ministry in the year starting 1 April, out of which Rs.4,727 crore has been kept for medical research. The national health mission will get 24.5% more than the allocation in the last budget. Child welfare has been allocated Rs.17,000 crore. The outlay for the roads ministry has been given Rs.28,942 crore, an upward revision of more than Rs.8,000 crore. The total outlay for the aviation ministry is Rs.8,865.40 crore for 2013-14. Of this, the biggest chunk has been earmarked for Air India Ltd. The flag carrier will get Rs.5,000 crore in 2013-14 against the aviation ministrys request to allocate Rs.8,500 crore for the airline which has been granted budgetary support for a decade by the cabinet. There is something for all sectors. The theme of high growth and inclusive development has been maintained, said Malvinder Mohan Singh, executive chairman, Fortis Healthcare Ltd.