Jaitley revises estimate for FY18, expects Rs 24.42 lakh crore total expenditure in FY19

While raising the fiscal deficit target during Union Budget 2018 speech, Finance Minister Arun Jaitley has increased total revenue receipt and expenditure targets for FY19.

The Finance Minister said, “This Budget reflects the government’s firm commitment to substantially boost investment in agriculture, social sector, digital payments, infrastructure and employment generation while simultaneously sticking to the path of fiscal rectitude.”

He said the government commitment is substantiated by increase in expenditure of Rs 2,24,463 crores over RE (2017-18).

The ministry expects total expenditure for FY19 to Rs 24,42,213 crore, while revised the estimate for FY18 to Rs 22,17,750 crore - higher from Rs 21,46,735 crore of previous budgeted estimate.

According to Jaitley, total revenue receipt target has been increased to Rs 17,25,738 crore for FY19, while for FY18, the estimates were revised to Rs 15,05,428 crore  - lower compared to previous budgeted estimate of Rs 15,15,771 crore.

With this, the fiscal deficit target is set at 3.5% of GDP by end of current fiscal, while the government expects to bring this target down to 3.3% in the next fiscal (FY19).

Jaitley said, “The Prime Minister and the Government have always attached utmost priority to prudent fiscal management and controlling fiscal deficit. He said that the present Government has embarked on the path of consistent fiscal reduction and consolidation in 2014.”

Fiscal deficit was brought down to 4.1% in 2014-15 to 3.9% in 2015-16, and to 3.5% in 2016-17. 

However, the revised fiscal deficit estimates for 2017-18 are Rs 5.95 lakh crore at 3.5% of GDP.

In order to impart unquestionable credibility to the government’s commitment for the revised fiscal glide path, Jaitley proposed to accept key recommendations of the Fiscal Reform and Budget Management (FRBM) Committee relating to adoption of the Debt Rule and to bring down the Central government’s Debt to GDP ratio at 40%.

The government has also accepted the recommendation to use fiscal deficit target as the key operational parameter. Necessary amendment proposals are included in the Finance Bill, Jaitley pointed out.