Union Finance Secretary TV Somanathan on Wednesday said there is likely to be a considerable increase in spending in the coming months due to additional expenditure on fertiliser subsidy and arrear payments to exporters, among some of the top spend items.
In an interview with CNBC-TV18, Somanathan said these are factors that analysts are not factoring in their reports which seem to indicate buoyant tax revenues will help the government settle for a lower than the budgeted fiscal deficit.
"Analysts are underestimating our expenditure side"
Somanathan said, "Even net of contribution to the states, we expect revenues to be above the budget estimate. However, there is also a considerable increase in several of the expenditure items, like the food subsidy.
But there are also others like an increase in the fertiliser subsidy and payments on account of arrears to the export incentive schemes like MEIS and SEIS which have also been announced. Therefore, perhaps some analysts are underestimating our expenditure side. So, there is an expenditure and revenue increase."
"PSB privatisation next fiscal"
He indicated that privatisation of public sector banks (PSBs) could spill over the next financial year. On being asked this, Somanathan said, "I would think that is probable, yes."
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The secretary said while tax revenues will beat the budget estimates this fiscal, there will be no inflow of non-tax revenues from the spectrum and AGR payments for the next four years due to the moratorium announced for the telecom sector. Also, uncertainty on how much of the disinvestment receipts aim will be met, cannot be discounted.
"Non-tax revenues gap on telecom moratoria"
"There is also a risk on the non-tax revenue side as moratoria that have been offered on the telecom package. So we will see some decline in the non-tax revenue. Then again, you know the progress made on privatisation like Air India but it’s too early to estimate the total receipts other than revenue will be because of all the reasons I have said," Somanathan said.
The secretary said the government will be making additional outlays for the vaccine budget for this fiscal, and while orders worth over Rs 36,000 crore for vaccines have been placed, the government is unsure of how much the actual additional cost will be.
"Vaccine orders worth Rs 36,000 crore placed"
He said the government has already made commitments exceeding about Rs 36,000 crore for the purchase of vaccine, "I am not saying payments, I am saying orders placed, which will need to be paid for. It’s already crossed Rs 36,000 crore, and as you can see the numbers are fairly good, and I think the government will probably achieve its target of vaccinating the adult population pretty soon and yes it will be above the budget. The budget was Rs 35,000 crore, I think it will be certainly above that, I am not yet able to speculate on the exact figure because there’s a mix of vaccines at different prices, some cheaper vaccines are likely to come."
"We will not be too far from our budget deficit projections"
However, the secretary is confident of being close to the deficit aim of 6.8 percent set for this financial year.
First Published: IST