...to fund the revenue gap.
Of the gross market borrowing of Rs 14.13 trillion estimated for FY25, Rs 7.5 trillion, or 53 per cent, is planned to be borrowed in the first half.
A labourer sieves grains at the Kalmana wholesale market in Nagpur. Photograph: ANI Photo
The government has spent 87 per cent, or Rs 3.6 trillion, of the total Revised Budget Estimates for financial year 2023-2024 (FY24) on major subsidies till February, at almost the same level of 88 per cent in the corresponding period last financial year, according to the latest data released by the Controller General of Accounts (CGA).
The data also shows that the government's external financing of the deficit has reached 148 per cent of the Revised Estimate till February 2024, compared to 118 per cent till the same month a year ago.
Of the total major subsidies, spending on food touched 84 per cent of the Revised Estimates for the same period, compared to 78 per cent till February last year. Experts feel lower procurement could be a reason for lower food subsidy.
The government's spend of the nutrient-based fertiliser subsidy has also been at a lower level compared to last year with 100 per cent of the Revised Estimates incurred till February as against 102 per cent in the corresponding period last year.
"It looks like there will be savings in both food and fertiliser spending. Lower oil prices have kept fertiliser prices in check," said Madan Sabnavis, chief economist, Bank of Baroda.
However, the government has increased its expenditure for petroleum subsidy utilising 66 per cent of the Revised Estimates till February compared to only 18 per cent last year till February 2023.
The spend on urea subsidy at 89 per cent of the Revised Estimate till February is also lower, compared to 104 per cent in corresponding period last year.
Of the domestic sources of financing the deficit, the government has utilised 108 per cent of the estimated market borrowings for FY24 till February, compared to 98 per cent in the corresponding period last year.
The overall domestic financing till February 2024 stood at Rs 14.64 trillion, or 86 per cent, of the Revised Estimates for this financial year, compared to 82 per cent till February 2023 for FY 2023.
"Tax collections have been better going by advance tax payments through disinvestment down. The fact that gross borrowings are lower than budgeted indicates comfort," Sabnavis said.
The Centre plans to raise Rs 7.5 trillion through market borrowing in the April-September period of 2024-2025 to fund the revenue gap.
Of the gross market borrowing of Rs 14.13 trillion estimated for FY25, Rs 7.5 trillion, or 53 per cent, is planned to be borrowed in the first half.
Feature Presentation: Ashish Narsale/Rediff.com
