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Pre-poll budget meetings to weigh food, fertilizer sops

 (Mint)
(Mint)

Summary

As many as 65 meetings planned with various ministries and departments between 10 October and 14 November.

NEW DELHI : The finance ministry will hold a series of meetings with various ministries and departments starting early October to finalize the revised budget estimates for FY24 and the FY25 budget numbers with a pre-election focus on balancing a possible rise in subsidy requirements with the need to maintain fiscal prudence.

As many as 65 meetings will be held within a span of a month, a person informed about the official schedule of consultations said.

The extensive consultations from 10 October to 14 November will assess the spending pattern so far this year, tax collection growth against the nominal gross domestic product (GDP) growth and any extra spending needed this fiscal year—especially for food and fertilizer subsidies, considering that they have been higher than last year in both absolute terms and as a share of the total budget allocation for the full year.

The meetings are expected to start with the ministry of new and renewable energy, and the department of north eastern region and statistics and programme implementation on 10 October.

These will be followed by discussions with the ministries of rural development, power, housing and urban affairs and petroleum and natural gas ministry among others in October.

Discussions with the fertilizer department, food ministry and agriculture ministry will be held in November, the person cited above said on condition of anonymity.

Given that it would be a pre-election budget, the political executive’s appetite for new ideas to be weaved into the budget is expected to be high.

However, on Tuesday, the finance ministry chose to send a clear signal to the market that it will stick to its market borrowing plan, when it announced the second half borrowing calendar for FY24. Some of the meetings will be chaired by finance secretary T V Somanathan and some by the additional secretary handling budget in the department of economic affairs.

An email sent to the finance ministry on Wednesday seeking comments for the story remained unanswered at the time of publishing.

Experts said that fiscal credibility will remain a priority for the government. “The government is unlikely to resort to populist measures despite impending elections and fiscal consolidation will be central," said Abheek Barua, chief economist and executive vice president at HDFC Bank.

“However, the trend of improving the expenditure mix, particularly higher spending on infrastructure will continue."

Figures for FY25 are likely to get revised in the full-year budget to be presented by the government after the general elections next year.

The government had budgeted 1.97 trillion for food subsidy and 1.75 trillion for fertilizer subsidy for FY24.

Upto the end of July, it had spent 68,494 crore on food subsidy, about a third of the full-year allocation. This is slightly more than what was spent in the same period a year ago.

In the case of fertilizers, 72,035 crore has been spent upto July, accounting for 41% of the full-year allocation, as per data available with the Controller General of Accounts.

Some experts pointed out that higher subsidy pay-outs for fertilizers, cooking gas and a likely rise in the allocation for rural jobs scheme MGNREGA could take up the Centre’s spending.

The government had collected 8.65 trillion in direct taxes up to 16 September after accounting for tax refunds, meeting a little more than half of the full-year target. Goods and Services Tax receipts too have been robust so far.

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