Explainer: How much does the Government actually spend compared to Budget allocations?

revenue, the expenditure estimates in the budget do not always translate into

actual spending. Here is a look at the expenditure under various broad heads. In the previous article on Union Budget, we explored the actual figures of Union Government’srevenues for 2017-18 and compared them with the estimated figures. In thisarticle, we would explore the estimates of expenditure provided for 2017-18,and the actual expenditure, especially among the various schemes funded by thecentral government. Expenditure estimates are based on the recommendations from individual Ministries The Ministry of Finance comes up with the expenditure estimates, based on the consultation with each individual ministry and department. Each ministry comes up with their estimates for expenditure, which is discussed with NITI Aayog. The finalized expenditure estimates are then shared by each of the ministries with the Finance ministry. These are termed as Demand for Grants. Apart from this, NITI Aayog and Finance ministry hold consultations with experts from various fields for recommendations on policies and schemes. The finance ministry takes into consideration these requests from the ministries along with the various recommendations. Based on the revenue estimates, they come up with the expenditure estimate for each of the ministries. As we havediscussed in the earlier article on the unionbudget, the actual values can only be ascertained after the completion of thefinancial year. The actual revenue and expenditure once ascertained are auditedbefore they can be presented before the house. Hence, whenever a budget ispresented, the actual figures are for the previous year i.e. in the budget for2019-2020, the actuals are for 2017-18. These actuals offer a good insight tounderstand the actual performance in comparison to the estimate and gives anopportunity to reset the course as required. Actual expenditure for 2017-18 higher than the estimates Like the casein receipts, even the expenditure is categorized as Revenue Expenditure andCapital expenditure. Technically, Revenue expenditure is that expense which neithercreated any new assets nor reduces the liabilities. These expenses are incurredin running government departments and services. They tend to be recurring andshort term in nature. Salaries of the employees, pensions, subsidies, interestpayments, grants are few of the examples of revenue expenditure. Capitalexpenditure is any expenditure which results in the creation of an assets orreduction of a liability. All the asset creation activities like buildings,roads, purchase of land, investments etc. are considered as capitalexpenditure. Repayment of an existing loan would also be counted as capitalexpenditure as it leads to reduction in the liability. The unionbudget for 2017-18 estimate the total expenditure at ₹ 25,31,762 crores,whereas the actual expenditure is higher at ₹ 27,52,659 crores. Both the actual revenue and actual expenditure ismore than the estimated figures for the year 2017-18. These number include notjust the expenditure through budget, but the resources of public enterprises also(commonly known as the Public Sector Undertaking or PSUs) The estimatedrevenue expenditure was ₹ 18,36,934 crores,however the actual revenue expenditure was ₹ 18,78,834 crores. Bulk of the increase is seen in the capitalexpenditure, that too, from the resources of public enterprises. In fact, theactual capital expenditure through budget for 2017-18 is ₹ 2,63,139 crorescompared to the estimated expenditure of ₹ 3,09,800 crores. Higher actual spending on flagship Centrally Sponsored Schemes Governmentschemes play a critical role in contributing towards the development story ofthe country. While each of the states have their own State Government sponsoredschemes in accordance to their own priorities, there are few schemes that aresponsored by the Government of India (GoI). These schemes are aimed atfulfilling national goals like literacy, health, nutrition etc. GoI schemes are broadly of two types What about the Centrally sponsored schemes? Centrallysponsored schemes are those schemes where the expenditure is shared between the GoI and the states. These are categorized as Core of Coreschemes, Core schemes and optional schemes. The total estimated expenditure for centrally sponsored schemes was ₹ 2,78,433.23 crores, while the actual expenditure for 2017-18 is ₹ 2,85,447.8 crores. MGNREGA occupies a significantportion (nearly 20%) of the expenditure incurred for Centrally sponsoredschemes. The estimatedexpenditure for of MGNREGA for 2017-18 was ₹ 48,000 crores, however the actual expenditure was more by nearly 15%i.e. ₹ 55,166.04 crores.