New Delhi: Seeking to restrict fiscal deficit at 4.8 percent of GDP, the Finance Ministry is likely to make a substantial cut in its Plan Expenditure for 2013-14 fiscal.
Finance Minister P Chidambaram has already committed to restricting the fiscal deficit for the current financial year to 5.3 percent of GDP and lower it further to 4.8 percent next fiscal.
Sources said the axe may fall on Plan Expenditure next year in order to restrict the fiscal deficit as per the roadmap under which it has to be lowered to 3 percent by 2016-17.
The Ministry, they said, will also scrutinise the utilisation of funds alloted in the current fiscal before releasing any amount for next year in the Budget, to be announced on February 28.
According to data of Controller General of Accounts (CGA), the Plan Expenditure has been 56.8 percent of the Budget estimates or about Rs 2.96 crore till December. However, the non-Plan Expenditure was 72 percent of Budget estimated at Rs 6.95 lakh crore.
Seeking to contain the fiscal deficit at 5.3 percent this year, the Finance Ministry has already asked all government departments to cap spending in January-March quarter at 33 percent of the total funds allocated for the full financial year.
"The restriction of 33 percent and 15 percent expenditure ceilings (in the last quarter of the current financial year and during the month of March respectively) is to be enforced both scheme-wise as well as for the demands for grant as a whole," the ministry had said.
The government had hiked the fiscal deficit target for the current fiscal to 5.3 percent of GDP, up from 5.1 percent estimated in Budget.
Government's fiscal deficit touched 78.8 percent of the budget estimates (BE) in the April-December 2012.
The rising subsidy bill and lower-than-expected revenue realisation has put pressure on government finances in the ongoing fiscal.
On the disinvestment side, the government has been able to raise just over Rs 10,000 crore so far, as against the target of Rs 30,000 crore for the entire 2012-13 fiscal year.
In November, the government sought approval of the Lok Sabha for additional expenditure of about Rs 32,120 crore for this fiscal, mainly to meet increasing oil subsidy bill and provide Rs 2,000 crore to the ailing Air India.
Of the total, Rs 28,500 crore will be used to compensate oil marketing companies on under-recoveries towards sale of subsidised petroleum products.
With additional grant, total funds earmarked for oil subsidy will soar to about Rs 72,260 crore in 2012-13.