Expenditure department cautions against more steps burdening the fiscal health

Expenditure department cautions against more steps burdening the fiscal health

The expenditure department in the finance ministry has cautioned against extension of the free ration scheme beyond September or reduction in any major tax rates. The country’s fiscal health is already under stress due to additional subsidies on fertilisers, cooking gas and reduction in excise duty on auto fuels and any further relief poses serious adverse fiscal consequences.

What has led to this situation?

Recent decisions on continuation of PMGKAY, the huge increase in fertiliser subsidy burden (both urea & non-urea), re-introduction of subsidy on cooking gas, reduction of excise duty on petrol & diesel and customs duty on various products have created a serious fiscal situation. The budgeted fiscal deficit at 6.4% of GDP was itself extremely high by historical standards, and deterioration therein poses a risk of serious adverse consequences

he Department of Expenditure is the nodal Department for overseeing the public financial management system in the Central Government and matters connected with state finances. It is responsible for the implementation of the recommendations of the Finance Commission and Central Pay Commission, monitoring of audit comments/ observations, preparation of Central Government Accounts. It further assists central Ministries/ Departments in controlling the costs and prices of public services, reviewing system and procedure to optimize outputs and outcomes of public expenditure. The principal activities of the Department include overseeing the expenditure management in the central Ministries/ Departments through the interface with the Financial Advisers and the administration of the Financial Rules/ Regulations/ Orders, pre-sanction appraisal of major schemes/ projects, handling bulk of the central budgetary resources transferred to State.

The business allocated to the Department of Expenditure is carried out through its Personnel &Establishment Division, Public Finance (States) and Public Finance (Central) Divisions, Office of Controller General of Accounts, Office of Chief Adviser Cost, and Central Pension Accounting Office.

The Department also has under its administrative control the National Institute of Financial Management (NIFM), Faridabad, which is an autonomous body.