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Pranab focuses on curbing non-Plan expenditure

EXPENDITURE: Non-Plan expenditure to rise about 9 per cent over the revised estimate to Rs 9,69,900 crore in 2012-13

Business Standard 

Finance Minister Pranab Mukherjee has estimated a 13 per cent increase in spending during 2012-13 at Rs 14,90,925 crore over the revised estimate of Rs 13,18,720 crore expenditure in the current year.

The current year’s spending has seen about 5 per cent increase over what was estimated at the beginning of the year. Though the government’s plan expenditure at Rs 4,26,604 crore this year has been lower than Rs 4,41,546 crore anticipated in the last Budget, the non-Plan expenditure has risen by little over 9 per cent to Rs 8,92,115.56 crore.

Non-Plan expenditure, which is expected to be double Plan expenditure this fiscal, will again rise about 9 per cent over the revised estimate to Rs 9,69,900 crore in 2012-13. “This increase is mainly on account of a higher provision for major subsidies. I am determined to contain the increasing subsidy burden through measures including improved targeting,” Mukherjee said in his Budget speech.

The non-Plan expenditure is a term used for both development and non-development expenditure and includes salaries, interest payment and spending on assets created through previous Plan spending. Overall, the attempt seems to be to bring down non-Plan expenditure to 65 per cent of the total expenditure in 2012-13 compared to 67 per cent in the current year.

Plan expenditure, which broadly includes spending on assets and is perceived to provide a push to economic growth, is estimated to be Rs 5,21,025 crore next year, an increase of about 22 per cent over the revised estimates of 2011-12. This appears to be a healthy sign, especially since the Plan expenditure has been lower than the budgeted in the current year. During the Eleventh Plan period on the whole, the government’s total Plan spending has been a tad lower at 99 per cent of the target.

The central Plan size for 2012-13 has been kept at Rs 65,1509 crore of which the capital expenditure will be more than half at Rs 3,47,980.76 crore and revenue expenditure will be Rs 3,03,528.49 crore. In the medium-term fiscal policy statement, the finance minister has said the government’s total capital expenditure will increase to 3.7 per cent of the GDP in 2013-14 and 3.9 per cent in 2014-15 compared to 3.6 per cent expected in 2012-13.

The government budgetary support for the Plan would be 60 per cent at Rs 3,91,027 with the remaining amount of Rs 2,60,482 crore coming from internal resources of public sector enterprises.

First Published: Sat, March 17 2012. 02:24 IST