Revising its earlier guidelines, the ministry has said that this can be done after an approval by the expenditure secretary. The budget division has, however, retained the cap on spending during the fourth quarter of the full year allocation, while limiting the spending during March at 15% of the annual spend.
The revised norms have also suggested better cash flow management. Financial advisers in ministries to allow spending of Rs 500-2,000 crore between the 21st and 25th of a month as GST revenue comes around this time.
Similarly, expenditure of over Rs 2,000 crore is sought to be “timed” towards the end of the quarter — between 17th and 25th day of June, September, December and March.
Besides, the financial advisers have been asked to closely monitor the release of funds to autonomous bodies and other organisation so that they do not sit on funds.
Further, dividend receipts from public sector entities are proposed to be pushed during the first half of the year with a similar focus on non-tax receipts.
With the government spend on food, fertiliser and fuel subsidies rising due to the recent increase in prices, along with duty concessions, analysts have suggested that the Centre may have to go for additional borrowings or curtail some of the spending. For the moment, higher borrowings have been ruled out as the government is hoping that higher tax col- lections will help it keep the fiscal deficit under check. Clearly, better management of cash is a focus.
The guidelines come at a time when the government is seeking to ensure that the capex plan for the year is not impacted as it is keen to revive economic activity, which may take a beating due to the recent spike in inflation. Higher interest rates, experts fear, will slow down some of the demand for loans. The Centre has maintained that it is going ahead with its capital-spending plan to boost asset creation along with demand for steel and cement and also create more employment.
A senior government official said that the thrust on asset creation over the last year or so has got the government agencies ready to meet the challenge and spending will flow during the of the year.