As a portion of GDP, total expenditures would be contained at 14.64 per cent in 2013-2014 (previous year 14.27 per cent). The share of total expenditure in GDP in 2011-2012 was 14.80 per cent.
Central Budget estimated to raise total expenditure by 16.39 per cent (Rs 234,471 crore) to Rs 16,65,297 crore in 2013-2014 from Rs 14,30,826 crore in 2012-2013. The Non-plan expenditure is higher by 10.82 per cent (Rs 108,337 crore) from Rs 1,001,638 crore in 2012-2013 to Rs 1,109,975 crore in 2013-2014. Under Plan expenditure, the Budget 2013-2014 estimated to increase by 29.39 per cent (Rs 126,135 crore) from Rs 429,187 crore in 2012-2013 to Rs 555,322 crore in 2013-2014. The share of total non-plan and plan expenditure in total expenditure are 66.65 per cent and 33.35 per cent respectively. (See Table No.2)
“Central assistance for State & Union Territory Plans” shown increased in 2013-2014. Interest payment shown increased by 17.06 per cent (Rs 54,010 crore) from Rs 316,674 crore in 2012-2013 to Rs 370,684 crore in 2013-2014. The increase in interest payments is 23.03 per cent of the total growth in expenditure.
Plan Revenue expenditure on 'Central assistance for State & Union Territory Plans' is increased by 23.72 per cent (Rs 23,621 crore) from Rs 99,601 crore in 2012-2013 to Rs 123,222 crore in 2013-2014, whereas the increase rate of that in the previous year was 6.41 per cent (Rs 5,997 crore) from Rs 93,604 crore to in 2011-2012 to Rs 99,601 crore in 2012-2013.
Plan Capital expenditure on 'Central assistance for State & Union Territory Plans' estimated to increased by 5.09 per cent (Rs 631 crore) from Rs 12,401 crore in 2012-2013 to Rs 13,032 crore in 2013-2014, whereas that increased by 6.95 per cent (Rs 806 crore) from Rs 11,595 crore in 2011-2012 to Rs 12,401 crore in 2012-2013.
Pension (under non-plan Revenue Expenditure) is higher by only 10.79 per cent (Rs 6,890 crore) from Rs 63,836 crore in 2012-2013 to Rs 70,276 crore in 2013-14. The share of Pension in Total Expenditure is only 4.25 per cent in the year 2013-2014 and it was 4.46 per cent in the previous year. (See Table No3)
Total Defence Expenditure is increased by 14.10 per cent (Rs 25,168 crore) from Rs 178,504 crore in 2012-2013 to Rs 203,672 crore in 2013-2014. The share of defence expenses in total expenses is 12.23 per cent (previous year 12.48 per cent). Financial Fecklessness for acquisitions of hardware particularly 'gold plating' and scams leads to difficulty of commercial, engineering and financial skills to negotiate contracts to acquire competitively. Reduced defence Budget, delayed or postponed or no acquisition will lead to terrorism and military adventurism across our borders.
The revenue defence expense is increased by 7.35 per cent in 2013-2014, whereas it was increased by 3.94 per cent in 2012-2013. Share of revenue defence expenses in total defence expenses is 57.41 per cent in 2013-2014, while it was 61.02 per cent in 2012-2013. The Capital defence expense in increase by 24.67 per cent. Share of capital defence expenses in total defence expenses is 42.59 per cent in 2013-2014, while it was 38.98 per cent in 2012-2013.
Ministry of Defence surrendered in year 2002-2003 Rs 9000 crores and 2003-2004 Rs 5000 crores respectively and in year 2010-11 surrender amount was Rs 5439 crores out of budgetary allocation is itself an questionable to which only parliament or its committees can address such non-utilization of funds.
Capital costs, which are meant for modernization, carryover of previous years (could be many years) incurred expenditure caters for a very large chunk of the expenditure, which leaves little balance for actual modernization.
(VIPIN MAlIK is a Practicing Chartered Accountant, Former Central Board Member of Reserve Bank of India and Bharatiya Reserve Bank of Note Mudran Pvt. ltd.(RBNMPl)
(vma@infomerics.com)