Spending cut of Rs 75K cr not to impact growth: Chidambaram

Finance Minister P Chidambaram today said the cut in total expenditure during the current financial year by about Rs 75,000 crore will not have much impact on growth.

"Now (with) an expenditure size of Rs 15.9 lakh crore (for 2013-14), I don't think Rs 75,000 crore (cut) will impact so much on growth as some people feared," he said at a post-budget press conference here.

The estimate of overall expenditure was revised to Rs 15,90,434 crore in the interim budget from an earlier projection of Rs 16,65,297 crore, a cut of Rs 74,863 crore.

The Central Statistics Office has estimated economic growth for the current financial year at 4.9 per cent compared with 4.5 per cent in 2012-13.

The government has cut Rs 79,790 crore from the budgeted Plan expenditure of Rs 5,55,322 crore for this financial year against the backdrop of a burgeoning fiscal deficit.

The Interim Budget 2014-15, presented by Chidambaram in Parliament, revised the estimate of Plan expenditure to Rs 4,75,532 crore for 2013-14.

On the other hand, the estimate of non-Plan expenditure was revised to Rs 11,14,902 crore in this financial year from the budgeted Rs 11,09,975 crore, a rise of Rs 4,927 crore.

The finance minister said, "On the Plan side, the expenditure has been cut or there has been savings of Rs 80,000 crore. On the non-Plan side, there has been an extra expenditure of Rs 5,000 crore.

"So the net expenditure reduction is Rs 75,000 crore. If you look at the total expenditure, Rs 15,90,434 lakh, Rs 75,000 crore represents about 5 per cent."

For the next financial year starting April 1, the government has kept the Budget estimate of Plan expenditure unchanged at Rs 5,55,322 crore.

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