FIX THE SPENDING GAP

The capital expenditure outlay has been increased by 35 per cent, but the yawning gap between outlay and actual spend is worrying

- M.G. ARUN

During the presentation of the Union Budget on February 1, finance minister Nirmala Sitharaman thanked the country’s taxpayers who, she said, had “contributed immensely and strengthened the hands of the government”. Sitharaman also made some big-ticket announcements, including raising the capital expenditure outlay by 35 per cent to Rs 7.5 lakh crore for the next financial year. However, what concerns taxpayers and experts is the tardy implementation, which creates a yawning gap between what is budgeted and what is eventually spent every year, with the labyrinthine central and state government machinery and the myriad processes of delivering funds creating enormous delays in execution.

The Covid pandemic has made matters worse, as is evident in the current financial year, leading to big gaps in government spending both at the central and state levels. Data from the Controller General of Accounts (CGA) shows that eight months into FY2021-22 (data is available only till November 2021), 40 per cent of the money set aside by the Centre for expenditure had not been spent. According to the CGA, the central government’s total expenditure till November was Rs 20.7 lakh crore, as against Rs 34.8 lakh crore earmarked in Budget 2021-22. This means only 59.6 per cent of the earmarked expenditure had been achieved.

SLOW SPENDING

The government’s targeted capital expenditure for 2021-22 is Rs 5.54 lakh crore, but it achieved only 49 per cent of that (Rs 2.73 lakh crore) till November. Capital expenditure is money spent by the government on the development of machinery, equipment, buildings, health facilities, etc. as well as in acquiring fixed assets like land. Ministries are likely to step up their capital expenditure towards the end of the financial year.