As Table 1 shows, the government has struggled to control the fiscal deficit since the 2008-09 Budget —" coincidentally, the last Budget before this one presented by P Chidambaram. The break-up of revenue and expenditure over the past years in Tables 2 and 3 shows how this has happened.
For the three years after the 2007-08 Budget, there was practically no increase in tax revenue. However, at the same time, government expenditure jumped up noticeably, till it was almost 2.5 percentage points of gross domestic product (GDP) more than it had been before the process started. Since then, reducing government expenditure has been a hard task, and it has remained above 14 per cent of the GDP.
In fact, this current financial year has seen some mammoth squeezing of spending in order to return it to the lowest percentage of GDP since 2007-08. What, precisely, has been squeezed? It is important to remember that this does not precisely reflect a government's priorities —" it may merely show those areas where expenditure can be postponed more easily, or which were padded out to begin with. Table 4 shows where the Finance Minister chose to cut. Rural development, road transport and health and family welfare —" all three locations of expensive Centrally-sponsored schemes —" have seen the biggest cuts. (Click here for table)
Several other sectors, including defence, have also been forced to produce hefty savings. Next financial year, the FM has given minimal increases to the sectors shown in Table 5; defence and Plan expenditure again feature heavily. Table 6 shows those areas which see a solid increase in funding next year, against the trend —" the Planning Commission, location of the UID, sees a big boost, but so do some others. Finally, Table 7 shows the major social sectors have seen increases in spending that barely keep up with inflation.
For the three years after the 2007-08 Budget, there was practically no increase in tax revenue. However, at the same time, government expenditure jumped up noticeably, till it was almost 2.5 percentage points of gross domestic product (GDP) more than it had been before the process started. Since then, reducing government expenditure has been a hard task, and it has remained above 14 per cent of the GDP.
In fact, this current financial year has seen some mammoth squeezing of spending in order to return it to the lowest percentage of GDP since 2007-08. What, precisely, has been squeezed? It is important to remember that this does not precisely reflect a government's priorities —" it may merely show those areas where expenditure can be postponed more easily, or which were padded out to begin with. Table 4 shows where the Finance Minister chose to cut. Rural development, road transport and health and family welfare —" all three locations of expensive Centrally-sponsored schemes —" have seen the biggest cuts. (Click here for table)
Several other sectors, including defence, have also been forced to produce hefty savings. Next financial year, the FM has given minimal increases to the sectors shown in Table 5; defence and Plan expenditure again feature heavily. Table 6 shows those areas which see a solid increase in funding next year, against the trend —" the Planning Commission, location of the UID, sees a big boost, but so do some others. Finally, Table 7 shows the major social sectors have seen increases in spending that barely keep up with inflation.