In view of the financial position of the central government, Finance Minister P Chidambaram in his recent meeting with financial advisors of different ministries has said that they should not "expect any sizeable increase" in the allocations during the course of the fiscal.
In the usual course, the Finance Ministry, on the basis of inputs from ministries, seeks approval of Parliament for raising the budgetary allocations through supplementary demands for grants. Chidambaram, according to sources, has advised the ministries not to seek additional funds at the meeting that was called to review the progress of plan and non-plan expenditure.
The directive is aimed at containing the fiscal deficit which, in the first four months of 2012-13, stood at 51.5 per cent (Rs 2.64 lakh crore) of the budget estimates. The government proposes to bring down fiscal deficit to 5.1 per cent of the Gross Domestic Product (GDP) in the current fiscal, from 5.8 per cent in 2011-12.
Chidambaram, according to sources, has also asked the ministries not to formulate new Centrally Sponsored Schemes (CSS) as they were "unlikely to find acceptability in the Ministry of Finance". .
Of the total 147 such Schemes, about 100 had an annual outlay of Rs 300 crore or less. The Minister has said that meagre outlays in such schemes (about Rs 50-55 lakh per district) were unlikely to create any appreciable impact on development process.
As per the Medium-term Expenditure Framework Statement tabled in Parliament on Friday, the total expenditure during the current fiscal is estimated at Rs 14,90,925 crore against Rs 13,18,720 crore.
On May 31, the Finance Ministry had asked all ministries and departments to reduce non-Plan expenditure by 10 per cent in the current financial year.
Besides other things, the rising oil and commodity prices in international market will have an adverse bearing on fuel and fertiliser subsidy bill this fiscal.