Seeking to contain fiscal deficit at 5.3 percent, the Finance Ministry has 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 said in an office memorandum.
Last month, the ministry had said there was a necessity to curb rush of expenditure in the last quarter of the year, particularly in the month of March, and restricted the expenditure in the last quarter of current financial year.
There was a need for prudent financial management expenditure rationalisation due to tight resource position in the current financial year, it 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.
The rising subsidy bill and lower-than-expected revenue realisation has put pressure on government finances in the ongoing fiscal. During the April-December period, direct tax collection grew by 8 percent, against the annual target of 15 percent as envisaged in the Budget.
On the disinvestment side, the government has been able to raise just over Rs 6,900 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.
At the time of revised estimates, various ministries come up with estimates of expenditures for the entire fiscal and furnish them to the Budget division in the Finance Ministry.