Ahead of the Budget 2014-15, the Expenditure Management Commission (EMC), headed by Bimal Jalan, has recommended the government to cut fiscal deficit to 3.6% of the GDP during 2015-16. The commission reviewed the major areas of central government expenditure and suggested ways to create fiscal space required to meet developmental expenditure needs.
The panel report, which was submitted to government on January 17, suggested ways to achieve a reduction in financial costs through better cash management, greater use of information technology and improved financial reporting systems. It also entrusted with designing a framework to improve operational efficiency of expenditures through focus on utilisation, targets and outcomes.
The government subsidy bill stands at around 2 lakh crore, playing an important role for widening the fiscal deficit. The subsidy bill on food, petroleum and fertilisers is estimated at Rs 2,51,397 crore for 2014-15, up 2.47 percent over the previous fiscal. The government has pegged total fertiliser subsidy higher at Rs 72,970.30 crore for full fiscal than Rs 67,970 crore proposed in the interim budget. The government has allocated Rs 1,15,000 crore for food security, which include a provision of Rs 88,500 crore for implementation of National Food Security Act.
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