The Centre hopes to save about Rs 10,000 crore (Rs 100 billion) in expenditure during the current financial year. The Budget had estimated the total expenditure for this year at Rs 4,10,309 crore (Rs 4,103.09 billion).

According to government officials involved in the Budget-making exercise, savings are expected in interest payments, defence, and Plan expenditure.

The savings would, however, be more than nullified by the huge shortfall in receipts to the tune of over Rs 20,000 crore (Rs 200 billion).

The latest estimates of this year's expenditure trend shows that the sharp drop in government securities yields would result in savings of at least Rs 2,000 crore (Rs 20 billion).

The weighted average cost of government borrowings have dropped by over 200 basis points from 9.44 per cent in 2001-02 to 7.20 per cent this year.

In defence too, the Centre hopes to contain expenditure at around Rs 62,000 crore (Rs 620 billion) as compared to the budget estimate of Rs 65,000 crore (Rs 650 billion).

The savings on this account would be between Rs 2,500 crore (Rs 25 billion) and Rs 3,000 crore (Rs 30 billion), officials said.

The biggest savings would come from the Plan expenditure.

In the pre-Budget meetings with various ministries in November-December 2002, the finance ministry had advised them against bunching expenditure in the last quarter of the financial year.

Several ministries were also asked to cut their Plan spend by about 10 per cent.

Officials said the Centre would save about Rs 5,000 crore (Rs 50 billion) in Plan expenditure this year.

The savings of about Rs 9,000 crore (Rs 90 billion) to Rs 10,000 crore (Rs 100 billion) should, however, be seen in the background of an additional expenditure of about Rs 9,000 crore through the first two supplementary demand for grants.