Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 on July 22. Following the presentation, Chief Economic Adviser Dr. V. Anantha Nageswaran held a press conference to address media queries regarding the survey. According to the Economic Survey, revenue expenditure growth remains restrained, with total expenditure for FY24 being ₹60.6 thousand crore lower than the budgeted estimates.
These lower-than-budgeted estimates have not resulted in compromises on important areas of revenue spending, such as rural development and education, where allocation is significantly higher than budgeted estimates. Efficient expenditure management, aided by lower borrowing costs, has led to a marginal downward revision of budgeted expenditure on interest payments in FY24.
In the report it was stated that even though expenditure on interest payments is lower than budgeted, it constitutes 30.4 per cent of the revenue expenditure in FY24 (PA). A commitment to fiscal consolidation in the medium term, combined with revenues from asset monetisation and privatisation, will be essential in reducing the share of interest payments in revenue expenditure in order to generate more fiscal headroom.
The report shows that the quality of spending by state governments improved, too, with state governments focusing on capex as well which helped in restraining the expenditure of the country.
The Survey acknowledges that “Expenditure on major subsidies declined by 22.1 per cent on a YoY basis, led by a decrease in fertiliser and food subsidies by 24.6 per cent and 22.4 per cent, respectively, in FY24. The general government debt to GDP ratio increased slightly in FY24 despite a declining primary deficit because monetary tightening led to a spike in interest rates, while the decline in inflationary pressures resulted in a lower-than-budgeted
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