Budget Byte: How GST collections and share of central scheme alter spending

While the actual expenditure on centrally sponsored schemes was more than the Budget estimate for FY17 and FY18, the target remained unmet in FY19 and FY20 (revised estimate)

The shortfall in the collection of Goods and Services Tax has altered the composition of fund transfers from Centre to states. Keeping devolution aside, the share of centrally sponsored schemes and Finance Commission grants in total transfers has reduced, as GST compensation increased the share of other transfers. 

While the actual expenditure on CSS was more than the Budget estimate for FY17 and FY18, the target remained unmet in FY19 and FY20 (revised estimate). This year, the government has spent generously on welfare programs, such as the rural employment guarantee scheme. Healthy spending in the remaining part of the year may reverse the trend.