'₹11 lakh crore spent on PM-Kisan, other social welfare schemes': Ex-Finance Secretary says there's room to cut spending

Former Finance Secretary Subhash Garg has flagged significant scope to cut social welfare and redistributive schemes such as PM-Kisan and food subsidies, which together account for nearly ₹11 lakh crore of the ₹48 lakh crore Union Budget.

Speaking on a podcast with entrepreneur Raj Shamani, Garg outlined four broad categories of government expenditure and identified areas where spending could be reduced or increased. He said the first category includes mandatory expenses over which the government has limited short-term control, such as interest payments on past loans, as well as salaries and pensions of government employees.

“These are expenses you cannot control in the short term,” he said, adding that such costs can only be managed over time by reducing the debt burden and keeping the fiscal deficit in check.

The second category, Garg said, includes spending on public goods and services such as law and order, security, macroeconomic stability, health, and education. “These are the kinds of expenditures that should increase, not decrease,” he said, stressing the need to prioritise these sectors.

The third category relates to growth-oriented capital expenditure and similar investments. Here, Garg noted that there is often room to reduce spending, particularly on projects that are unnecessary or inefficient. “In many of these areas, there is room to cut spending,” he added.

Garg said the government should focus on two key priorities while reforming expenditure—capital spending and public goods and services. “Unnecessary or wasteful capital expenditure should be reduced. But identify areas where we currently don’t spend and should spend to promote growth,” he said.

He also pointed to environment and pollution-related initiatives as areas that receive minimal funding despite directly affecting quality of life, calling for more imaginative investment in public infrastructure and stronger security spending.

Garg added that he has examined these issues in detail in his annual budget commentary over the past two years, analysing each major head of expenditure to identify where spending is justified and where it can be curtailed.

Referring to last year’s Budget, he criticised the government’s announcement of five major employment programmes, including employment-linked incentive schemes, internship programmes, and initiatives to strengthen ITIs. “I wrote about these and explained that these employment programs were poorly conceived and implemented without proper thought. There’s a lot of scope to improve here,” Garg said.