Who spent what in FY22: A study of ministry expenditures

People watching budget updates in Shimla (HT)
People watching budget updates in Shimla (HT)


  • Following the disruption in fund utilisation across ministries during the pandemic year, expenditures are returning to normal levels in the current fiscal, but some lingering effects remain.

After failing to use up their full budget allocations in the first pandemic year, central ministries are back on track in terms of expenditure patterns in the fiscal year 2021-22, shows spending data released on Tuesday. Most of the 55 ministries covered in the analysis have fared better this year than they did in 2019-20, the last pre-pandemic year, in terms of seeing through their budgeted spending. High levels of fund utilisation augurs well for a government that has earmarked a hefty increase in 2022-23 to create new assets and spur the economy.

A ministry’s fund utilisation level can be gauged by looking at how much it spends out of what it was allocated in the Budget a year ago. In 2020-21, which was disrupted by the pandemic, 29 of the 55 ministries spent less than 80% of their allocated sums. In 2021-22, this number is expected to drop to just three (tourism, petroleum and natural gas, and communications), the revised estimates show. Further, 25 ministries are expected to spend more than their allocation, with a utilisation rate above 100%, indicating a resurgence in expenditure.

The picture for capital expenditure—the spending that creates new assets, and therefore has multiplier effects on investments, income and jobs—is one of extremes. While 20 ministries are likely to end the year having spent less than 80% of their budgeted capex, another 20 are also set to exceed their budgets. But the first set of ministries collectively account for less than 9% of the Centre’s total capex, and the second set account for 87%.


Spenders spend big

Overall, fund utilisation levels in the high-spending ministries have been better in 2021-22. Last year, several of the 10 top-spending ministries saw a massive spike in their expenditure, notably consumer affairs and rural development, through which distress alleviation and welfare spending measures flowed. Along with them, ministries big on capex like railways, roads and defence also recorded high levels of utilisation. However, there were four top-spending ministries where utilisation levels capped out at 86% (home affairs, education, agriculture and finance) as the government reprioritized funds and certain expenses were not required.

Eight of the 10 top-spending ministries from 2020-21 have a fund utilisation level of above 100% in 2021-22. The exceptions are education and agriculture, which though have improved over last year. On the capex side, 80% of the Centre’s capex was incurred across just three ministries—defence, road transport and highways, and railways—and their utilisation levels under this head exceeded 100% in 2021-22.

Laggards pick up

One effect of pandemic-hit 2020-21 was several important ministries seeing significantly lower expenditure than allocated that year. These included several welfare-oriented ministries such as women and child development, tribal affairs, and social justice and empowerment. Despite spending less, their allocations were not cut in the 2021-22 budget. They have bounced back in 2021-22.

Of the 10 largest ministries whose fund utilisation was below 80% in 2020-21, nine have recorded a higher fund utilisation in 2021-22, and eight of them are above 90%. Crucial infrastructural industries such as power and Jal Shakti (water resources and sanitation) are at 100%.

However, the ministries of tourism, petroleum and natural gas, and communications, remain significant laggards in utilisation. On capex, even beyond the top-spending ministries, utilisation rates have improved across several other key ministries such as housing and urban affairs, space and atomic energy, suggesting a broader recovery.

Centre-led push

Robust fund utilisation is seen across ministries, as well as across six key categories of expenditure. In 2020-21, as the Centre scampered to provide relief, utilisation of expenses funded entirely by the Centre (Central sector schemes/projects) and those funded majorly by the Centre but with a state component (Centrally sponsored schemes) naturally spiked. Such additional expenditure represents a higher fiscal burden for the Centre, and was expectedly reined in for 2021-22, though their utilisation levels stayed above 100%.

The post-pandemic year, 2021-22, saw a rationalisation of expenditure across ministries, following the disruption caused by the pandemic. Buoyed by tax revenues, the Centre is looking at 2022-23 being a big-spending year. It has budgeted for an increase of 5% in total expenditure and 25% in capex. Its ability to pull this off, across ministries, will depend a lot on how it manages its internal capacities and the unforeseen challenges of providing additional interim funds for welfare objectives.

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