Government spending, Deficit in focus ahead of budget

As the government gets down to the business of drawing up the budget, there is a growing view among some influential sections that there should not be any spending cut on key programmes to meet the fiscal deficit target. 

The reasoning is that fiscal slippage, if any, is likely to be from the revenue side because of the disruption caused by the imposition of the goods and services tax (GST) and not reckless spending. The budget is likely to be presented early February. 

Cutting spending on investment to meet the deficit target, in such a situation, would stall economic recovery, an official privy to discussions told ET. Ahigher deficit would also allow the government to recalibrate the fiscal consolidation road map to create room to step up allocations in FY19 for the farm sector to address agrarian stress. 

"In a year of twin shocks (GST and demonetisation), should we not be more accommodating to allow the economy some support?" said a senior official, making a case against expenditure cuts in flagship programmes of the government as well as key social welfare schemes. #casansaar (Source - Economic Times)