Budget 2021

Plan Expenditure

FM Nirmala Sitharaman seen with Anurag Thaur, CEA a day before Budget 2020 | Photo: Dalip Kumar

Full team of Budget FY21

Nirmala Sitharaman

Ashok Lavasa

Data

Infrastructure

Union Finance Minister Arun Jaitley with Union Railway Minister Suresh Prabhu leaves after addressing the media regarding the cabinet meeting in New Delhi

cashier counts rupee notes inside a bank in Mumbai

India Inc capital expenditure to remain muted this financial year

Government mulling abolishing plan, non-plan expenditure: Watal

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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>

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

What is Plan Expenditure

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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.</div>

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

Expenditure Budget

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	Those expenditures of the government that do not lead to the creation of fixed assets are called revenue expenditures. The government spends money under various accounting heads, such as paying interest on loans, salaries and pensions, subsidies, spends on different ministries and departments, etc. Grants made to state governments and other parties are also treated as revenue expenditures, even though these might be used for the creation of fixed assets.</div>
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	Budget Estimates (BE) for 2018-19 pegged the Indian government&rsquo;s revenue expenditure to have grown 10.2 per cent over the Revised Estimates (RE) for 2017-18. That was a big drop from over 15 per cent growth in the preceding year.&nbsp;</div>
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	The Union government had cut its total expenditure by about Rs 1.45 trillion over its revised estimates for 2018-19. Of this, Rs 13,000 crore was cut on account of capital expenditure and Rs 1.32 trillion under revenue expenditure.</div>
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	The bulk of the expenditure compression was achieved through off-Budget borrowing. The burden of such borrowing fell on many public sector undertakings (PSU), such as Food Corporation of India (FCI), Housing and Urban Development Corporation, National Housing Bank and Rural Elec&shy;trification Corporation.</div>
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	Even though there is no official confirmation of such borrowing, the figures put out by the Controller General of Accounts (CGA) revealed it all. For instance, the CGA&rsquo;s 2018-19 figures showed how the food subsidy bill came down by a whopping 40 per cent over Rs 1.71 trillion mentioned in the revised estimates.&nbsp;</div>
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What is Revenue expenditure of government, Revenue expenditure of government Meaning, Budget News

Revenue expenditure of the government

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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>

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

Non-Plan Expenditure

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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.</div>
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Plan Expenditure

What is Plan Expenditure

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