NEW DELHI: Government has surpassed the Rs 5 lakh crore mark for capital expenditure (capex), representing over 50% of the budgeted target for the ongoing financial year 2023-24, a senior official said.
The official expressed confidence that revenue and spending trends are in line with expectations, and the fiscal deficit target of 5.9% of the gross domestic product will be achieved for the current fiscal.
“There is no major concern regarding tax receipts, as overall revenue is on track to meet the budget target. Expenditures are also in line with predictions. The centre aims to maintain its glide path for fiscal consolidation and has no reason to believe that the fiscal deficit target will not be met,” the official cited above said.
As per the government’s glide path, it is looking to lower its fiscal deficit to 4.5% GDP by 2025-26. Pre-budget discussions are underway with various ministries, and additional demand is anticipated from key government schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme, as well as fuel and fertilizer subsidies due to global geopolitical tensions, according to him.
He further added that additional demands for MNREGS will be considered within prudent limits.
Regarding the recent increase in government bond yields due to rising US Treasury yields and geopolitical tensions, the official stated that it is not currently a big concern.
The government is monitoring the situation and will take appropriate measures if the yields exceed tolerance levels, he said.
In addition, the official also informed that in the period of April-September, collections under small savings schemes have significantly surged. Deposits for senior citizens savings scheme grew over 2.5 times year-on-year, reaching a record high of Rs 74,675 crore ($10.1 billion).
This marks a remarkable 160% increase compared to the corresponding period last year. The newly introduced Mahila Samman Savings Certificate, unveiled in this year’s budget, gathered collections amounting to Rs 13,512 crore during April-September.
The interest rate for the Senior Citizens Savings Scheme was raised to 8.2% from 8% in the April-June period and has remained unchanged since then.
Moreover, the investment limit for elderly individuals in the scheme was raised to Rs 30 lakh from Rs 15 lakh starting from April this year.
Meanwhile, the official noted that the interest rate for the Public Provident Fund (PPF) scheme has remained unchanged at 7.1%.
“The government has considered the tax benefits associated with the PPF scheme in maintaining the interest rate, as it prioritizes schemes for senior citizens and women such as the Sukanya Samriddhi Account Scheme. The PPF scheme still offers one of the highest returns, but the costs and revenue loss due to tax benefits need to be factored in,” said the official.
From the National Small Savings Fund, against which the Centre and some states borrow, for the fiscal year 2023-2024, the government plans to utilize Rs 4.71 lakh crore to finance a portion of its overall fiscal deficit.