Fiscal deficit for 2017-18 pegged at 3.2% of GDP and to achieve 3% in 2018-19

Total expenditure for 2017-18 has been placed at ₹ 21.47 Lakh Crore

States and the Union Territories with legislatures allocated  Rs. 4.11 Lakh Crore in 2017-18, as against ₹ 3.60 Lakh Crores in be 2016-17

Defence expenditure excluding pensions provided a sum of ₹ 2,74,114 Crore including  ₹ 86,488 Crores for Defence Capitalwhile  scientific ministries allocated  Rs. 37,435 Crore in 2017-18.

Greater focus on quality of expenditure and higher tax realisation from huge cash deposits triggered by Demonetization

The Union Minister of Finance and Corporate Affairs while presenting the General Budget 2017-18 in Parliament today said that the total expenditure in Budget for 2017-18 has been placed at ₹ 21.47 lakh crores. With the abolition of Plan-Non Plan classification of expenditure, the focus is now on Revenue and Capital expenditure. Taking  note of the fiscal deficit roadmap for the next three years and considering the need for higher public expenditure in the context of sluggish private sector investment and slow global growth, the Finance Minster Shri Jaitley has  pegged the fiscal deficit for 2017-18 at 3.2% of GDP and further committed to achieve 3% in the following year i.e. 2018-19.

The Union Finance and Corporate Affairs Minister Shri Arun Jaitley further said that he has stepped-up the allocation for Capital expenditure by 25.4% over the previous year with the aim of fiscal consolidation, without compromising the requirements of public investment. Presenting his Fourth Budget for 2017-18 in Parliament today, the Finance Minister Shri Arun Jaitley said that the total resources being transferred to the States and the Union Territories with Legislatures is ₹ 4.11 lakh crore in 2017-18, as against ₹ 3.60 lakh crore in BE 2016-17.

Shri Jaitely said, a provision of ₹ 3,000 crore has been made under the Department of Economic Affairs to implement various Budget announcements and other New Schemes in 2017-18. For Defence expenditure excluding pensions, he provided a sum of ₹ 2,74,114 crores including  Rs. 86,488 crores for Defence capital.  The Finance Minister increased allocation for Scientific Ministries to ₹ 37,435 crore in 2017-18.

In his Budget Speech , the Finance Minister Shri Arun Jaitley said  he has taken due care to limit the net market borrowing of Government to ₹ 3.48 lakh crores after buyback, much lower than  Rs. 4.25 lakh crores of the previous year. More importantly, the Revenue Deficit of 2.3% in BE 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at 1.9% , against 2% mandated by the FRBM Act. The Government will further improve upon these fiscal numbers, especially the fiscal deficit, in the next year, through greater focus on quality of expenditure and higher tax realisation from the huge cash deposits in Banks, triggered by demonetization, Shri Jaitely concluded.

Fiscal deficit target drives tighter borrowing limits and higher capital spending to advance fiscal consolidation. Fiscal policy establishes a multi year consolidation path by pegging the fiscal deficit at 3.2% of GDP for the current year and committing to 3% of GDP the following year, with a focus on limiting net market borrowing, increasing Capital expenditure, reducing the Revenue Deficit, and using higher tax realisation from post demonetisation deposits to support targets.