New Delhi: Ahead of the February 29 presentation of India’s budget 2016 for the next fiscal, the government on Monday promised a growth-oriented budget that would also keep in mind the country’s fiscal constraints.
“Given the fiscal parameters and other constraints, the effort of the government will be to have a budget which is growth-oriented and that will maintain the momentum of growth,” Economic Affairs Secretary Shaktikanta Das said in an interview on the finance ministry’s YouTube channel.
On the government’s expenditure plans and the fiscal deficit target for the next fiscal, he said the effort will be to maintain a balance between both of these.
“A balance has to be found between the expenditure requirements and how much the government can borrow and the repayment capacity. The truth lies in the middle, and the government has to do a balancing act,” he said.
The government said last week that the reason behind India’s high growth rate is the quality of public expenditure.
“In the current fiscal, our capital expenditure, which goes into asset creation, has seen a significant growth as against revenue expenditure, which goes into salary payment and rent … and is resulting in high growth,” Finance Secretary Ratan P. Watal said on Saturday on the ministry’s YouTube channel.
Noting that revenues being received are in tandem with expenditure the government is incurring, he said this meant that things were moving as planned.
According to official data, plan expenditure during April to December was 74.4 percent of the budget estimates, as compared to 61.3 percent during the same period a year ago.
The government has targeted reducing the fiscal deficit to 3.9 percent of the gross domestic product (GDP) in the current financial year, from four percent last year, and reduce it further to 3.5 percent in 2016-17.
The Indian economy grew 7.3 percent in the third quarter ended December 31, 2015, down from the 7.7 percent expansion in the previous quarter, but marginally up over 7.1 percent recorded in the like period of last fiscal, official data showed earlier this month.
The government’s mid-year economic review, released December, lowered economic growth forecast for the current fiscal to the 7-7.5 percent range, from previously projected 8.1-8.5 percent, mainly because of lower agricultural output due to deficient rainfall.