Strengthening Social Security and Fiscal Management

The Finance Ministry has communicated to Parliament the government's emphasis on enhancing the quality of public spending, concurrently reinforcing the social security network for the underprivileged. This commitment is detailed in a statement addressing deviations from Fiscal Responsibility and Budget Management (FRBM) Act targets. The government remains steadfast in its pursuit of fiscal consolidation, aiming to reduce the fiscal deficit to under 4.5% by the next financial year.

Given the recent escalation of global conflicts and the resultant economic uncertainty, the government asserts the necessity for a flexible fiscal policy to mitigate potential adverse global impacts. The ministry's nine-page document highlights that, despite a gloomier global economic environment since the budget presentation in July, fiscal indicators for the first half of the current financial year remain within FRBM prescribed limits.

While revenue receipts have exceeded the five-year moving average, total government receipts have fallen below. This, coupled with expenditure also lagging the five-year average, has resulted in a fiscal deficit at 29.4% of the budget estimate, significantly lower than the five-year average of 63.8%. This focus on expenditure quality aligns with the government's recent efforts to prioritize higher capital expenditure, reduce wasteful spending, and more effectively target subsidies. This strategic spending pattern is expected to persist in the upcoming budget.