Government committed to growth revival, fiscal consolidation, says Finance Ministry

Government committed to growth revival, fiscal consolidation, says Finance Ministry

India News

The government is committed to growth revival by increasing public investment while maintaining fiscal deficit target of 3.2 per cent for the current fiscal, says a finance ministry study. The fiscal policy of the government and hence the budget 2017-18 has been guided by the twin macro-economic need of reviving growth momentum while being committed to fiscal consolidation, said the Fiscal Responsibility and Budget Management (FRBM) quarterly statement at the end of first quarter of 2017-18 prepared by the finance ministry. During the first quarter (April-June) of 2017-18, the growth rate of GDP was subdued at 5.7 per cent as against 7.9 per cent in the corresponding quarter of 2016-17. Despite fall in growth rate in first quarter, gross tax revenue receipts grew by 15.2 per cent over corresponding period of previous fiscal, which is higher than budgeted growth rate of about 11 per cent for a year, it said.“Government’s firm commitment for growth revival by increasing public investment and reviving public demand is visible in substantial increase in expenditure over corresponding period of previous year,” it said. At the end of June 2017, total expenditure in nominal terms was higher by Rs 1,38,899 crore than the corresponding period of the previous fiscal, and as a percentage of Budget Estimate (BE), it was 4.4 percentage higher, it said. The increased pace of expenditure may also be seen in the context of an advancement of budget cycle which was undertaken as major budgetary reform in 2017-18 budget, it said.“At the end of the first quarter of 2017-18, deficit as a percentage of BE was higher as compared to corresponding period of previous fiscal. This may be seen mainly in the context of higher pace of expenditure,” it said. With improvement in macro-economic parameters and streamlining of GST regime, it said, higher resource mobilisation in the later part of the year is expected. Measures initiated by government for expenditure management and fiscal prudence etc are also underway and incremental benefits may accrue in later part of the financial year, it added.