The ministries will also submit their revised estimates (RE) of expenditure for 2023-24, which may see some surrendering a portion of their budget due to their inability to spend, while some may seek additional funding.
The finance ministry will kick-start the annual Budget exercise next month by writing to all the ministries to provide their budget estimate (BE) for 2024-25, including a well thought-out expenditure estimate for the first six months, to avoid any funds shortage till a new government assumes office, a senior official said.
The ministries will also submit their revised estimates (RE) of expenditure for 2023-24, which may see some surrendering a portion of their budget due to their inability to spend, while some may seek additional funding.
Led by finance secretary TV Somanathan, the finance ministry’s meetings with various ministries will commence in batches from early October and continue till early November. The circulars in this regard will be issued in September.
“The ministries have to be realistic in their projections till September-October next year and realise that whatever they had asked for does not fall short after the Budget,” the official said, adding that ministries should keep in mind that further spending approvals from Parliament may take time.
In election years, the Budget session of Parliament is very short (it was about ten days in 2019). Hence, there is little headroom to get additional funds other than approved through the vote on account for running expenses for a few months till the next government takes Parliament’s nod to spend more. If the ministries take approval to appropriate 50-60% of their FY25 requirement through the vote on account, it would help them tide over any possible fund crunch.
“In fact, all ministries have to be realistic in their budgeting both for this year and next year,” the official said, adding that funds allocated should not be unspent as the government is following just-in-time release to keep the cost of borrowing lower.
The Centre will likely spend over 60% of the Rs 10-trillion capex budget for the current fiscal by September, the official said. This will be enabled by the robust pace of spending being maintained by the key infrastructure ministries and agencies and front-loading of release of capex loans to the state governments.
Source:financialexpress.com