NDA vs UPA: How the two governments fared on capex and subsidies in the last 20 years

In the last 20 years, the size of the government’s expenditure budget has increased more than 8 times, or 856 per cent to Rs 45.03 lakh crore in financial year 2023-24 (FY24) from 4.71 lakh crore in FY04. In that time, India was ruled by two different coalition governments. In the first 10 years, Manmohan Singh-led UPA was in power from FY04 to FY14 and from May 2014 (FY15) to FY24 Narendra Modi-led NDA has been administering the Indian government. Ahead of the general election next year here’s a look at how these two governments spent taxpayers’ money in their tenure.

Government Budget: Data available from the CMIE database showed that under the UPA government, the annual Budget size increased 231 per cent to Rs 15.59 lakh crore in FY14 from Rs 4.71 lakh crore in FY04. While under the Modi government it has increased 189 per cent to Rs 45.03 lakh crore as per estimates for the Union Budget FY24.

Capital Expenditure (capex): Infrastructure development projects such as the construction of railways, highways, bridges, airports, sea ports, and the setting up of schools, colleges, hospitals, etc. are considered capex.

In FY04 when the UPA government assumed power, the total government capex was Rs 1.09 lakh crore or 23.2 per cent of the total Budget. In the ten years, annual capex under the UPA Government has increased 72 per cent to Rs 1.88 lakh crore in FY14. However, in FY14 the capex share in the total budget was reduced to 12 per cent from 23.2 per cent. During these 10 years, Singh’s government spent a total of Rs 12.4 lakh crore on capex.

During the Modi government spending on capex has increased 433 per cent to Rs 10.01 lakh crore in FY24 from Rs 1.88 lakh crore in FY14. Also, the share of Capex in the total budget has increased to 22.2 per cent from 12 per cent in FY14. As per budget estimates the NDA government will spend 43.9 lakh crore on capital expenditure in ten years.

Subsidies: A subsidy is a transfer of money from the government to provide financial assistance to public and business entities. Major components of subsidies provided by the Central government includes food subsidy including sugar, fertiliser subsidy, interest subsidy, and subsidy on petroleum products, etc.

In FY04, total spending on subsidies was Rs 44.3 thousand crore or 9.4 per cent of the total Budget. Annual subsidies under UPA government increased 474 per cent to Rs 2.55 lakh crore in FY14, while the share of subsidies in the total Budget jumped to 16.3 per cent. During those 10 years, Singh’s government spent a total of Rs 13.96 lakh crore on subsidies.

During the Modi government, spending on subsidies has increased 58 per cent to Rs 4.03 lakh crore in FY24 from Rs 2.55 lakh crore in FY14. The share of subsidies in the total Budget has reduced to 9 per cent from 16.3 per cent in FY14. As per the latest Budget Estimates the Modi government will spend 36.94 lakh crore on subsidies in its 10 years.