The State government is optimistic that the Centre would relax the Fiscal Responsibility and Budget Management (FRBM) Act norms. The Government got an assurance from the Centre that the request would be discussed at the Cabinet meeting. The Government has been desperately pleading with the Centre for over a year now to relax the norms to increase the borrowing limit by at least 0.5%, if not 1%, from the 3% cap.
Finance Minister Yanamala Ramakrishnudu held a review meeting with the Finance and Planning Departments officials as part of the budget preparation exercise here on Monday.
Later, Mr. Ramakrishnudu told a press conference that the fiscal deficit stood at 3.8% and was almost crossing 4%. An increase of 1% in the FRBM limit would get leverage of ₹3000 crore to ₹4,000 crore.
The Finance Ministers of many States too made a similar request at the GST Council meeting recently. He said Union Finance Minister Arun Jaitley had told him that it would be referred to the Central Cabinet. It seems that the Government of India also had a need for it (revision of FRBM limit), he said.
The Minister said the additional expenditure was for ₹23,000 crore worth proposals. Some portion of this had already been released. Some departments had not touched the schemes in the budget estimates. “There is gap in allotment and expenditure. Still they are asking for additional budget. So, we suggested going for re-appropriation. This would help in bringing down the additional expenditure.”
Mr. Ramakrishnudu said it was decided to contain the revenue expenditure this year so that “we get a benefit of going for higher capital expenditure”. The revenue deficit was ₹16,000 crore when AP was bifurcated. Now, it is ₹4,000 crore. The revenue deficit is 1.7%. As far as possible we try to bring it down. In the next three years, it would be brought down to zero. The 14th Finance Commission also estimated the same, he said.
