Business Today

Hits & Misses

A look at the current years spending by key ministries can help one understand the finance ministers priorities in the Budget
by Joe C. Mathew | Print Edition: February 12, 2017
Hits & Misses
[Photo: Raj Verma]

The forthcoming Budget session will be the first time in 92 years when there will be no separate presentation of the railway budget. That, hopefully, will not be an excuse for Railway Minister Suresh Prabhu to not give an update of the grand modernisation, infrastructure and investment plans, covering the entire railway ecosystem, that he had laid out in his previous budgets. Prabhu, in fact, will have to spell out his achievements, as numbers - the amount of money spent by the ministry so far from its Plan and non-Plan allocations - doesn't seem to suggest any extraordinary performance.

In fact, the railway ministry is among the bottom five ministries in spending budgetary allocations in the first eight months of 2016/17 (till November end). Out of the Rs 45,000 crore sanctioned in the 2016/17 Budget, it has so far utilised Rs 18,677 crore, just 41.5 per cent of what it was allocated. During the same period in 2015/16, it had spent 55.5 per cent out of the total allocation of Rs 40,000 crore. It is not alone. Quite a few other ministries have also under-utilised their Budget allocations this financial year (allocations and expenditures have been calculated after taking both Plan and non-Plan expenditures into account).

So, despite tall promises, the power ministry, which saw its allocation almost double to Rs 12,252 crore in 2016/17, has not been very active in spending that money. It had spent only 47 per cent annual allocation by the end of November, lower than the 61 per cent in the year-ago period. The power ministry is in charge of the government's prestigious rural electrification mission, the Deen Dayal Upadhyaya Gram Jyoti Yojana.

Compared to these two, the other ministries that spent the least were allocated much less. Further, the office of the Controller General of Accounts, which collates this information, is yet to provide the data for December. The ministries still have two more months to spend their allocations. One should also account for the general trend among ministries to spend more towards the end of the financial year.

The spending of the 2016/17 budgetary allocations could give an idea about the direction the government is taking and the possible priorities of Finance Minister Arun Jaitley as he presents the Union Budget on February 1, 2017.

Also, in several ministries, though the money spent in percentage terms has been lower than what it was during the same period in 2015/16, that does not necessarily mean that they have spent less. For instance, out of an allocation of Rs 5,035 crore, the Ministry of New and Renewable Energy had, till November 2016, spent just above half - Rs 2,611 crore, compared to a whopping 213 per cent during the same period in 2015/16. In absolute terms, however, the picture is entirely different. The 2015/16 annual allocation was just Rs 303 crore; the ministry had spent Rs 646 crore during the same period in 2015/16.

Another example is the Ministry of Drinking Water and Sanitation. Its expenditure of Rs 8,937 crore during April-November 2016 is 64 per cent of the Rs 14,009 crore annual allocation. In the same period in 2015, it had spent 103 per cent of its annual allocation. But in absolute terms, that meant an expenditure of only Rs 6,454 crore, as the budgetary allocation was just Rs 6,243 crore. The Ministry of Water Resources, River Development and Ganga Rejuvenation had spent Rs 4,225 crore (68 per cent of its annual budget) till November. This was close to the total amount budgeted for the whole year in 2015/16, and almost double of what was spent in the same period in 2015/16. These ministries are key players in the government's Swachh Bharat Mission. The same trend is seen in the Ministry of Women and Child Development, which had spent Rs 11,097 crore, 64 per cent of the annual allocation of Rs 17,408, till November.


Ram Vilas Paswan, the Minister of Consumer Affairs, Food and Public Distribution, would be the happiest. His ministry has surpassed almost every other ministry in utilisation of resources. By the end of November, it had spent Rs 1,27,954 crore, over 90 per cent of the Rs 1,41,391 crore that was allocated to it. A very big chunk went into procurement of pulses. The ministry administers food security and foodgrain procurement missions; both have a direct impact on India's farm economy.

Thanks to the implementation of the One Rank One Pension Scheme, Defence Minister Manohar Parrikar can also claim success with use of the money allocated to his ministry. By November, it had spent Rs 2,19,816 crore, 64 per cent of the Rs 3,40,921 crore that it was allocated. It had utilised only 58 per cent of the total allocation during the same period in 2015/16.

The Ministry of Rural Development had spent Rs 68,503 crore, almost 78 per cent of its annual allocation, till November. The figure was 80 per cent during the same period of 2015/16, though the amount already spent this year is close to Rs 73,332 crore, the total amount that it was allocated for the entire 2015/16.

The Ministry of Urban Development spent Rs 21,619 crore, 88.2 per cent of the annual allocation of Rs 24,523 crore, during the April-November period. The utilisation for the same period the previous year, in terms of percentage, was much less (just 59 per cent).

The Ministry of Housing and Urban Poverty Alleviation, which spent Rs 4,064 crore, 75 per cent of its allocation of Rs 5,411 crore, is another example. The uptake was just 7 per cent during the same period last year. The Ministry of Agriculture spent Rs 34,333 crore, 77 per cent of Rs 44,485 crore, the total allocation for the year. In the same period in 2015/16, the figure was 60 per cent. According to rules, if the budget is insufficient, ministries can seek supplementary grants. It's a regular feature and needs Parliament's approval.

At ministries of human resources development and social justice and empowerment, too, the percentage of money spent has surpassed the previous year's figures. This time around, most ministries seem to have tried to front-load spending. If this is a deliberate move, the year 2017/18 is going to see the impact of this increase. The stated objective of advancing the Budget by one month is itself enabling the ministries to start spending early. The November numbers could be a signal to what one can expect the next year. ~


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