New Delhi: India’s government has reduced the spending limits available to ministries and departments, as lower-than-expected revenue collections put pressure on fiscal deficit goals.

Expenditure in the last quarter of the financial year ending March 31 has been capped at 25 per cent of the budget estimate from 33 per cent allowed earlier, the Finance Ministry said in an office memorandum this week. That means departments, which have spent only 67 per cent of the money allocated to them by December, won’t be able to use at least 8 per cent of the budgeted funds.

“Considering the fiscal deficit position of the government in the current financial year, it has been decided to cap the expenditure in the last quarter/last month,” the ministry said. Spending in the last month of the fiscal year has been restricted to 10 per cent of budget estimate from 15 per cent earlier.

The government has a budget deficit target of 3.3 per cent of gross domestic product for the fiscal year through March. Spending cuts in the last quarter have helped governments to narrow their fiscal gap in the past, although calls are now growing for the government to loosen its budget to spur economic growth.

Until October end, some of the ministries, including food processing, skill development and environment, hadn’t even spent half of their budgeted allocation.