Union Budget 2020: Finance Min directs govt departments to slowdown last minute spending

At a time when ecomy is at lowest, ahe of Union Budget,  Finance Ministry has directed all government departments t to rush last minute spending for current financial year. According to ministry, if y do so, it will be a breach of financial propriety.

Department of expenditure said in a circular, "According to Rule 62(3) of General Financial Rules, 2017, rush of expenditures particularly in closing months of financial year shall be regarded as a breach of financial propriety and shall be avoided. Finance ministry h alrey sensitized all ministrative hes' rush of expenditure in year must be strictly avoided. As per extant guidelines, last quarter expenditure must be limited to actual procurement of goods and services and reimbursements of expenditures alrey occurred." 

Budget circular furr ded, "Considering fiscal position of government in current financial year, it has been decided to cap expenditure in last quarter/last month of current financial year." 

Fiscal Data

According to government sources, Finance Ministry h provided a total expenditure target of Rs 27.86 lakh crore. government has alrey spent 65 per cent of total expenditure till vember this year. However, spending reduced a slowdown since October. As per sources, government will be cutting down spending by at least Rs 2 lakh crore in order to slow down rising fiscal deficit. Furr, as per reports, even though earlier target to keep fiscal deficit was around 3.3 per cent, government is w likely to keep it under 3.8 per cent of Gross Domestic Product (GDP). 

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What is fiscal deficit?

A fiscal deficit can be defined as a shortfall of government's income compared to its spending. It is difference between total revenue and total expenditure of government. A fiscal deficit is usually calculated as per cent of total Gross Domestic Product (GDP). 

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Centre's GDP estimate for 2019-20  

According to  first vance estimates released by Centre on January 7, India's real GDP (Gross Domestic Product) growth during financial year 2019-2020 is expected at 5% as compared to last year's 6.8%. This estimate is in line with Reserve Bank of India's (RBI) own revised estimate in December. ecomy grew by 4.5%, lowest in six years, in second quarter (July-September) of this fiscal in weakening from previous quarter's 4.8 per cent.

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Budget 2020

2020 Union Budget, which will be presented by Finance Minister Nirmala Sitharaman on February 1, is being pegged as one that will have to serve dual purposes of driving industry investment, and also increasing consumption. 

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