The Modi government seems to be loosening its purse strings. Thus, going by CGA data, central government expenditure shot up 30 per cent in September, over 19 per cent in the previous month and twice the pace in this month in last two fiscals. Nevertheless, because of decline in June-July, the increase in expenditure of 6.6 per cent over H1 is less than a half of 16.6 per cent in this period a year ago, or 15.8 per cent two years back. The cumulative expenditure over the period was 48 per cent of the yearly budget, against 48.6 per cent last year.
Fiscal deficit, net borrowing to bridge expenditure-receipt gap, shot up nearly fivefold during September, but was up by a modest 6.5 per cent during H1 due to sharp decline during June-July. The H1 deficit, however, accounted for 82.6 per cent of annual net budgeted borrowing, worse compared to 76 per cent in H1 of 2013-14 and 65.6 per cent in this period two years ago.
Non-plan expenditure increased 30 per cent during September and 7.5 per cent over H1, half the pace in the corresponding period a year ago. Non-plan revenue expenditure, which forms nine-tenth of non-plan disbursements, increased 9.4 per cent and mirrored a half of the annual budget spend. Interest payment increased 16 per cent cumulatively and other non-plan revenue expenditure 6.5 per cent. Non-plan capital expenditure declined 11.5 per cent. Defence outlay, forming a major chunk of non-plan capex, declined 14.5 per cent.
CENTRAL GOVERNMENT FINANCE DURING H1
% to BE
|Non-Debt Capital Receipts||5331||-24.5||7.2|
Plan account expenditure increased 4.3 per cent during H1, ending cumulative decline till August, thanks to 33 per cent shoot-up during August-September. Plan account disbursement formed 43 per cent of annual budget. Ministries spending more than a half of annual allocation included ministry of agriculture (51 per cent), ministry of civil aviation (71 per cent), ministry of renewable energy (117 per cent), ministry of road transport and highways (66 per cent), ministry of rural development (54 per cent), ministry of science and technology (51 per cent) and ministry of women and child development (60 per cent).
The ministry of drinking water and sanitation (29 per cent), ministry of home affairs (36 per cent), ministry of power and ministry of urban development (33 per cent), ministry of housing and urban poverty (29 per cent), and ministry of panchayati raj (28 per cent) were among the ministries with considerable under-spend. The ministry of railways spent half of annual allocation.
Revenue receipt slowed to 7.2 per cent, from 11.1 per cent during H1 of 2013-14 and 15 per cent in the same period two years ago. Net tax receipt increased 5.1 per cent and non-tax receipt 15.1 per cent. Tax receipt was only one-third of annual amount budgeted for the source. Service tax increased 14.2 per cent and personal income tax 11.9 per cent.
Corporate tax increased 5.6 per cent, thanks to the quarterly increase of September. After remaining in negative zone during April-July, reflecting a surge in import, customs duty increased 15.5 per cent in August and twice this rate in September, which led to 5.3 per cent increase over H1. Excise remained in the negative zone over H1. Non-tax receipt increased 15.1 per cent over H1, thanks to bumper profit transfer by RBI to the central exchequer. Non-tax receipt over H1 constituted 45 per cent of annual budgeted amount.