Govt to keep a lid on spending to avoid fiscal slippage

Govt to keep a lid on spends to avoid fiscal slippage

The government will closely monitor its spending to complement the RBI’s measures to curb inflation and manage the external account amid capital outflows, ET officials said. The Ministry of Finance will inform ministries and departments not to expect additional funds in the revised revenue expenditure estimates. The government is cautious as a fiscal slippage could undermine the RBI’s efforts to manage inflation. “Ministries and departments will have to stick to the budget estimates,” said a senior government official.

Income Expenses may be reduced. “There is little scope for further subsidization,” the official said. “There could be a reduction in revenue.” There will be no reduction in capital expenditure budgeted at ₹ 7.5 Lakh crores in the current fiscal. ET had earlier reported that the government may not submit an additional demand for grants during the monsoon session that has just begun.

The fiscal deficit for FY23 is ₹16.6 lakh crore or 6.4% of GDP. The government faces a sharp rise in food and fertilizer subsidies and has had to restore support for cooking gas to protect consumers.

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