As the government grapples with a tight fiscal situation, about a quarter of its 100-odd departments / ministries have not spent even one-third of the money allocated to them in the first seven months of the year. Since there is a ceiling of 33 per cent for expenditure in the last quarter, expenditure of all these departments is likely to remain much below the Budget Estimates (BE).
Some such as Atomic Energy, Pharmaceuticals, Posts, Consumer Affairs, Corporate Affairs, Minority Affairs, Power, Steel, and Water Resources have not even spent a quarter of what was allocated to them.
In case of most of these departments / ministries, it is unlikely that their Plan expenditure in November and December would be more than what they have spent during April-October.
According to finance ministry officials, not many departments are able to use 33 per cent of the Budget allocation in the last quarter, barring a few such as the Department of Financial Services which utilises the fund to capitalise banks in the last quarter.
On the other hand, the Department of Chemicals and Petro-Chemicals, Civil Aviation, External Affairs, and Mines have spent more than two-thirds of their Plan expenditure till October. (Click here for chart)
At times, the government relaxes the rule for some departments to allow them to spend more than 33 per cent in the last quarter. But this time, it would do so only in rarest of the rare cases as Finance Minister P Chidambaram himself is monitoring the spends.
Overall, the ministries have spent 43 per cent of the allocated Plan expenditure in April-October 2012, compared to 46 per cent in the year-ago period. However, non-Plan expenditure, which includes subsidies, is 57.2 per cent of the BE, against 58.7 per cent in April-October 2011.
Earlier this month, the finance ministry had asked all government departments to strictly adhere to its guidelines on restricting expenditure to 33 per cent of the BE in the last quarter of the financial year and 15 per cent in the last month.
In the recently-concluded pre-Budget / revised estimate meetings, finance secretary R S Gujral emphasised on the need for prudent financial management and expenditure rationalisation due to the government’s tight resource position in the current financial year.
The government has estimated its 2012-13 total expenditure (Plan and non-Plan) at Rs 14.90 lakh crore, of which 52.3 per cent or Rs 7.79 lakh crore has been used till October, against 54.1 per cent during the same period of 2011-12.