Aid for states up 184%; central ministries get 24% less

EXPENDITURE: Non-Plan spending rose by 0.4 per cent even while Plan expenditure declined

The Finance minister has budgeted for a 10.8 per cent increase in the government’s spending in 2014-15 at Rs 17,63,214 crore compared to current year RE of Rs 15,90,434 crore.

The government was able to cut its spending in the current year by 4.4 per cent. In line with the overall slowdown in growth, the government’s Plan expenditure for 2013-14 too saw a 14 per cent decline to Rs 4,75,532 crore against the estimate of Rs 5,55,322 crore at the beginning of the year. Non-Plan expenditure, however, rose by a marginal 0.4 per cent to Rs 4,75,532 crore.

The non-Plan expenditure is likely to rise by 8.3 per cent to Rs 12,07,892 crore in 2014-15 over RE of Rs 11,14,902 crore. Of this, the expenditure on subsidies for food, fertiliser and fuel will be Rs 2,46,397 crore.

However, Plan expenditure for 2014-15 has been kept at the same level at which it was budgeted in 2013-14 — Rs 5,55,322 crore. The finance minister, however, said that adequate funds have been provided for all the key flagship schemes.

A big jump, 184 per cent,  in Central assistance to states shifted the onus for spending social-sector Plan money from Centre to states. Consequently, outlays for central ministries were down 24 per cent.

 

In a bid to tighten spending, the Plan outlay for rural development was cut from Rs 61,810 crore in RE to Rs 7,614 crore in the Budget Estimate for next year. The outlay for health and family welfare was cut from Rs 25,990 crore to Rs 7,726 crore, while the budget for drinking water and sanitation has been slashed from Rs 12,000 core to Rs 231 crore. On the other hand, outlays were raised for the urban development ministry (36 per cent) and power ministry (12 per cent).

Of the total budgeted spending of Rs 17,63,214 crore in FY14, revenue expenditure accounts for 88 per cent or Rs 15,50,054 crore, while Rs 2,13,160 crore has been allocated for capital expenditure. In the medium-term fiscal policy statement, the finance minister has said the government managed to cut down its total expenditure to Rs 15,90,434 crore in RE from the budgeted Rs 16,65,297 crore “to provide for space for private investment and easing of monetary policy”.

Non-Plan expenditure refers to both development and non-development spending. Overall, the attempt seems to be to bring down non-Plan expenditure to 68 per cent of the total expenditure in 2014-15 as compared to over 70 per cent in the current year.