Ranen Banerjee, Leader Economic Advisory Services, PwC India

Ranen Banerjee

Expenditure profile

Budget 2021

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	Expenditure profile is a full compilation of information from all ministries and departments to analyse the Union government&rsquo;s financial performance. It documents budgetary trends on important policy issues, such as gender budget, welfare of women, resource allocation for the northeastern states and many other important issues. It also contains consolidated information about government schemes, such as centrally-sponsored schemes, subsidies, and investment in public-sector undertakings (PSUs).</div>
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	Since the merger of the Railway Budget with the Union Budget in 2017-18, the information in the expenditure profile also includes a detailed analysis of the Ministry of Railways. The statements contained in this document are prepared on the basis of inputs given by ministries and departments. Some of the statements are based on the data contained in the Expenditure Budget.</div>
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	The Expenditure profile provides a summary of expenditure of the Union government which includes actual revenues and capital spent in the previous financial year and the budgeted and revised estimates for the current financial year, besides estimates for the upcoming financial year.</div>
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	The document also provides a statement of major variations in expenditure between Budgeted Estimates and Revised Estimates of the ongoing financial year. It details the expenditure of ministries and departments, transfers to Union Territories and legislature. Expenditure profile also lists in detail the spending on subsidies &mdash; food, fertiliser and other important ones.</div>
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	The five parts of the expenditure profile also include information about spending on external sectors, such as externally aided projects and loans to foreign governments. The final part is the detailed statement of analysis on railways with an overview of receipts and expenditure.<br />
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	<strong>Read full&nbsp;Expenditure profile documents<br />
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	<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2021-02/vol1.pdf" target="_blank">Expenditure profile 2021-2022</a></strong></div>
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RELATED BUDGET TERMS

Learn what is Expenditure profile, Expenditure profile Definition, Expenditure profile News and more here at Business Standard.

What is Expenditure profile, Expenditure profile Definition, Expenditure profile News

What is Expenditure profile

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		The Expenditure Budget of the government highlights the allotment of funds for disbursement to different ministries, sectors, departments in a financial year as part of the Union Budget. The allotments are made under Plan and non-Plan estimates for departments and ministries concerned.&nbsp;</div>
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		The government prepares the expenditure portfolio in three different documents:&nbsp;</div>
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		<strong>1. Expenditure profile:</strong> The expenditure profile compiles relevant data across all ministries and departments to sketch a profile of the general financial performance of the government. It is one of the explanatory documents that aid economic analyses. The statements contained in this document are prepared on the basis of data given by ministries. Some of the statements are based on the data contained in the Expenditure Budget. It includes Budgetary trends on gender Budget, the welfare of women and children, resource allocation for the northeastern states and welfare of SC/STs.</div>
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		<strong>2. Demand for Grants:</strong> It is the document in which estimates of expenditure from the consolidated fund of India are submitted in pursuance of Article 113 of the Constitution. They are included in the annual financial statement and are required to be voted upon in the Lok Sabha. The demands for grants include both charged and voted expenditure. These are further classified as revenue and capital expenditure according to the nature of end-use.</div>
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		<strong>3. Expenditure Budget:</strong> As explained above, the Expenditure Budget contains details and estimates of the amount to be allocated to different ministries and departments for their proper functioning in a given financial year.&nbsp;</div>
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		<strong>What are the parts of Expenditure Budget?</strong></div>
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		The Expenditure Budget is further divided into capital expenditure and revenue expenditure.&nbsp;</div>
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	<strong>Capital Expenditure:</strong> This expenditure pertains to amount spent on the creation of assets and is a cause for a reduction in liabilities for the government. It is non-recurring in nature and adds to the capital stock of the economy, increasing its productivity through long-term developmental programmes and welfare schemes &mdash; for instance, construction of metro rail networks, highways, ports, etc. It also includes the loans given to Union Territories and states, and repayment of borrowings.&nbsp;</div>
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	<strong>Revenue Expenditure:</strong> This section details of expenditure that neither creates assets nor causes a reduction in liability for the government. It is recurring in nature and is incurred on the normal functioning of the government. The allocations under Revenue Expenditure include payment of salaries, pension, interests, expenditure on administration, defence, health, and other services in the country.<br />
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	<strong>Read full&nbsp;Expenditure Budget documents<br />
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	<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2021-02/allsbe.pdf" target="_blank">Expenditure Budget 2021-2022</a></strong></div>

Learn what is meant by Expenditure Budget, Expenditure Budget definition and more Expenditure Budget news here at Business Standard.

What is Expenditure Budget, Expenditure Budget Meaning, Expenditure Budget Definition

Expenditure Budget

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	The government&#39;s expenditure can be divided into two parts &mdash; plan and non-plan. Plan expenditure is that component of government expenses which helps increase the productive capacity in the economy. It includes outlays for different sectors, such as rural development and education.</div>
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	Unlike non-plan expenditure, which is mostly fixed and obligatory in nature, plan expenditure is part of Budget estimates determined after discussions with the ministries and stakeholders concerned.</div>

Learn what is Plan Expenditure, Plan Expenditure Definition and more Plan Expenditure news here at Business Standard.

What is Plan Expenditure, News, Budget 2020 News, Plan Expenditure Definition

Plan Expenditure

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	The government&#39;s total spending can be divided into two broad sub-heads &mdash; plan and non-plan &mdash; with the latter constituting the bulk of expenditure.</div>
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	Non-plan expenditure is what the government spends on the so-called non-productive areas and is mostly obligatory in nature. It includes salaries, subsidies, loans and interest.</div>
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	Plan expenditure, on the other hand, pertains to the money set aside for productive purposes like various projects of ministries. It is spent on productive asset creation through Centrally-sponsored programmes and flagship schemes.</div>

Learn what is Non-Plan Expenditure, Non-Plan Expenditure Definition and more Non-Plan Expenditure news here at Business Standard.

What is Non-Plan Expenditure, News, Budget 2020 News, Non-Plan Expenditure Definition

Non-Plan Expenditure

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	Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also includes the expenditure incurred on acquiring fixed assets like land and investment by the government that gives profits or dividend in future.&nbsp;<br />
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	The Budget estimate of the government&#39;s capital expenditure for the year 2020-21 was Rs 1,084,748 crore. The revised estimates of capital expenditure for the 2019-20 Budget came at Rs 1,059,472 crore, while the actuals for the 2018-19 Budget stood at Rs 915,670 crore.</div>
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	<strong>Understanding capital expenditure</strong></div>
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	Capital spending is associated with investment or development spending, where expenditure has benefits extending years into the future. Capital expenditure includes money spent on the following:</div>
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		Acquiring fixed and intangible assets</li>
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		Upgrading an existing asset</li>
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		Repairing an existing asset</li>
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		Repayment of loan</li>
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	<strong>Why is capital expenditure important?</strong></div>
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	Capital expenditure, which leads to the creation of assets are long-term in nature and allow the economy to generate revenue for many years by adding or improving production facilities and boosting operational efficiency. It also increases labour participation, takes stock of the economy and raises its capacity to produce more in future.</div>
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	Along with the creation of assets, repayment of loan is also capital expenditure, as it reduces liability.</div>
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	However, the government has to be cautious with the expenditure. In the financial year 2019-20, capital expenditure was 14.2 per cent of Budget Estimates. The government had to cut public spending sharply towards the end of the financial year in order that the deficit target could be met. Total expenditure fell by 0.3 percentage points in 2018-19 over 2017-18. This includes a 0.4 percentage point slash in revenue expenditure and 0.1 percentage point hike in capital expenditure.</div>
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	<strong>How is capital expenditure different from revenue expenditure?</strong></div>
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	Unlike capital expenditure, which creates assets for the future, revenue expenditure is one that neither creates assets nor reduces any liability of the government. Salaries of employees, interest payment on past debt, subsidies, pension, etc, fall under the category of revenue expenditure. It is recurring in nature.</div>
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Learn What is Capital Expenditure, its definition, Capital Expenditure, meaning and more budget related news here at Business Standard.

Expenditure profile

What is Expenditure profile

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