Since 2004-05, a majority of ministries have not spent the sum allotted to them, but this govt has improved on this aspect in the two middle years of its tenure
In FY13 and FY14, 77% and 73% ministries, respectively, underutilized their funds by above 5%
The department of space is trusted with the responsibility of steering India’s space programme. Come every budget, successive finance ministers allocate more money to it: from ₹2,731 crore in 2004-05 to ₹10,783 crore in 2018-19. However, in 12 of the past 13 years for which complete spending data is available, it has spent anything between 6% and 42% less than the budgeted amount.
The department of space is not alone in practising such frugality, which generally stems either from the ministry’s inefficiency in planning and spending, or from the government channelling the money elsewhere. Since 2004-05, a majority of Union ministries have not spent the amount allocated to them each year, though this government has improved on this aspect significantly in the two middle years of its tenure.
This underspending, or overspending, can be assessed only for two years. For example, in February 2017, when he presented the budget for 2017-18, finance minister Arun Jaitley announced allocations for various ministries (termed ‘budget estimates’). In February 2018, the government released what it expected to spend in 2017-18 (‘revised estimates’). It’s only in February 2019 that it will state the exact amount spent by it in 2017-18 (‘actuals’). Thus, this difference between the budget estimates and actuals is the overspend or underspend. We looked at this data for the past 13 years to 2016-17, the latest available. This spans 10 years of the Congress-led UPA government and three years of the current BJP-led NDA government.
In three of its 10 years, the UPA spent less than what it budgeted for at the overall level. It also showed a high level of variance across years, overspending by 17.7% in 2008-09, partly to absorb the contagion of the financial crisis and partly to fund a farm loan waiver. Similarly, in 2010-11, it overspent by 8% and then underspent by 5.4% in 2012-13 and 6.4% in 2013-14. The bout of underspending continued during the NDA’s first year in 2014-15. But in the two years since, the variance over the budgeted amount has been marginal (see chart 1).
Both governments have seen many of the 53 ministries seeing a shortfall in spending. In just four of the 13 years have more than 40% of these 53 ministries used their allocated amount. This happened in 2008-09 and 2010-11 under the UPA, and 2015-16 and 2016-17 under the NDA.
The years 2012-13 and 2013-14 were the worst on this count, when 77% and 73% ministries, respectively, underutilized their allocations by above 5%. In its first year, 2014-15, the NDA struggled to get going on ministry-wise spending, with this figure staying at 73%. It did much better in the subsequent two years: 60% of ministries have either spent all their allocations or had a shortfall of up to 5% (see chart 2). In this government, ministries that have lagged in utilization include commerce and industry; new and renewable energy (previously non-conventional sources); mines; planning; shipping; skill development and entrepreneurship; social justice and empowerment; tourism and culture; and water resources. Conversely, some that have done well include atomic energy; civil aviation; communications and information technology; corporate affairs; drinking water and sanitation; environment and forests; food processing; health and family welfare; home affairs; and rural development. The variance remains.
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