UPDATE:Govt's expenditure to rise in FY'10 on subsidies, 6th Pay Comm

The government's total expenditure for the first time will surpass the Rs 10,00,000-crore mark in the current fiscal.     

The government's total spending for the current fiscal has been hiked by 36 per cent to a record Rs 10,20,838 crore, Finance Minister Pranab Mukherjee said while presenting the Budget today.     

Ideally, the government may have wanted the rise more in the Plan expenditure that goes to create assets, the non-Plan expenditure grew at a faster pace and accounted for more than two-third of the total spending.     

While the Plan expenditure for 2009-10 was increased by 34 per cent to Rs 3,25,149 crore, the non-Plan expenditure has shot up by 37 per cent to Rs 6,95,689 crore, which is 68.2 per cent of the total expenditure.     

The reasons for the bloating non-Plan expenditure are higher interest payments, up by 18.2 per cent, (constituting over 36 per cent of the non-plan revenue expenditure), and higher subsidies, up by 55.8 per cent.     

"The increase in non-Plan expenditure is mainly on account of implementation of the Sixth Central Pay Commission recommendations, increased food subsidy and higher interest payment arising out of the larger fiscal deficit in 2008-09," Mukherjee said.     

Interest payments and prepayment premium of the government during the current fiscal is estimated to be Rs 2,25,511 crore as against Rs 1,90,807 crore in the Budget estimate of the last financial year 2008-09.

The government, in its Budget, increased the total provision for subsidy during the year 2009-10 by more than 55 per cent to Rs 1,11,276 crore from Rs 71,431 crore in the Budget estimate for the last fiscal 2008-09.

Other factors pushing up the non-Plan revenue expenditure includes the same towards defence, police and pensions, which saw an increase of 50.9 per cent, 63.2 per cent and 39.4 per cent, respectively.

However, the total outlay on defence, including both non-Plan revenue expenditure as well as non-Plan capital expenditure, has gone up by 34 per cent to Rs 1,41,703 crore from Rs 1,05,600 crore in Budget estimate of 2008-09.