In early April, the expenditure department had put in place a new cash management system for the April-June period under which there was no spending limit for ministries such as health, Ayush, agriculture, aviation, food, railways and textiles, which were at the centre of the battle against Covid-19.
In contrast, ministries such as coal, commerce and industry, urban affairs, education and skill development were among the 52 heads where spending in the first quarter was capped at 15% of the annual outlay. There was also a third set where the quarterly expenditure ceiling was fixed at 20% of the allocation for 2020-21.
When contacted, expenditure secretary T V Somanathan confirmed that a proposal was being looked at for the full financial year. “The details will have to be worked out in terms of ministries in each category,” he said. On the expenditure fund, the government is budgeting for savings under some heads such as petroleum, where the subsidy on cooking gas has vanished, and official travel, which has come to a halt. In fact, petroleum may turn into a revenue spinner after the government raised central excise duty, although the funds will move into a special entity to finance infrastructure projects such as highway construction.
But food subsidy is expected to go up as the government is going to distribute foodgrains to ensure that the poor do not go hungry, while also procuring aggressively to fill up granaries. At the same time, it expects higher outflow for health for which an additional Rs 15,000 crore is being sanctioned with Rs 4,100 crore going to states under the National Rural Health Mission to help them develop testing facilities and other infrastructure.