The government's revenue shortage has begun to impact expenditure.
Data shows that the Centre has tightened spending. Its expenditure as a percentage of Budget Estimate (Rs 24.42 lakh crore) has crossed just 66 per cent until November 2018 compared to 69 per cent last year. This may not appear substantial but the government has realised that meeting its revenue targets will be tough.
After all, it could collect 50 per cent of the budgeted revenue target of Rs 17.25 lakh crore, three per cent lower than before.
The Centre is going slow on revenue expenses (including salary, pension, and other administration costs) than capital expenditure specifically in the Commerce, Corporate Affairs, North East Affairs, Housing and Urban Affairs ministries. It would be interesting, however, to see if it can keep its revenue expenses in control and yet not sacrifice asset building.