India’s government has reduced the spending limits available to ministries and departments, as lower-than-expected revenue collections put pressure on fiscal deficit goals.

Expenditure in the last quarter of the financial year ending March 31 has been capped at 25% of the budget estimate from 33% allowed earlier, the Finance Ministry said in an office memorandum this week. That means departments, which have spent only 67% of the money allocated to them by December, won’t be able to use at least 8% of the budgeted funds.

“Considering the fiscal deficit position of the government in the current financial year, it has been decided to cap the expenditure in the last quarter/last month," the ministry said. Spending in the last month of the fiscal year has been restricted to 10% of budget estimate from 15% earlier.

The government has a budget deficit target of 3.3% of gross domestic product for the fiscal year through March. Spending cuts in the last quarter have helped governments to narrow their fiscal gap in the past, although calls are now growing for the government to loosen its budget to spur economic growth.

Until October end, some of the ministries, including food processing, skill development and environment, hadn’t even spent half of their budgeted allocation. Latest data on government’s expenditure and revenue for April-November period will be released later Tuesday.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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