Keep austerity in mind when preparing 2024-25 Budget proposals, says Finance department


Launching work on the 2024-25 State Budget, the Finance department has asked government departments to keep in mind the concept of austerity when preparing their Budget proposals.

“The serious financial constraints being faced by the State government make it imperative for the government to prepare the Budget 2024-2025 with extreme austerity,’‘ the department has observed in a circular containing directions for preparing the estimates for the Budget.

The Finance department has urged department heads to prepare the estimates as realistically and accurately as possible so that they do not prove either excessive or inadequate later on. Further, the estimates related to revenue and other dues to the government should be prepared keeping in mind the need to accelerate collections. They have also been asked to furnish information on the extent of arrears, the reasons for it and the measures adopted to recover them.

Economic measures in Budget preparation may require departments to drop uneconomical schemes and put off activities like maintenance. Department heads have been asked to prepare a list of surplus staff arising from such such measures.

The 2024-25 Budget is expected to be presented during the last quarter of the current fiscal.

The directions have been issued at a time when the State is experiencing a crunch on the financial front. In mid-July, Finance Minister K.N. Balagopal observed that the State is likely to face fiscal constraints of a more severe nature in 2023-24 compared to previous years. The State government also urged the Centre to allow it an ‘‘ad hoc borrowing increase’‘ of 1% of the Gross State Domestic product (GSDP) above the ceiling set for the 2023-24 fiscal given the resource losses suffered by the State.

Non-plan expenditure

As per the directions, the government departments need to submit the estimates for non-plan expenditure by September 5, Plan expenditure by September 10 and revenue estimates and other receipts by September 15. As in previous years, the proposals will be placed through the Budget Monitoring System.

The 2023-24 Budget presented by Mr. Balagaopal in February last had projected revenue receipts of ₹1,35,418.67 crore and a revenue expenditure of ₹1,59,360.91 crore for the current fiscal. The medium-term fiscal policy had projected the GSDP to grow at 11.23% in nominal terms during the fiscal.

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