Initial data on cash management plans for the first quarter in nine central ministries have shown a 28 per cent utilisation of allocated expenditure targets.
According to data compiled by the finance ministry, the spending patterns indicated that the government would be able to reverse the spectre of bunched expenditure in the last two months of the current fiscal.
With effect from April, the finance ministry has asked the ministries of health, rural development, fertiliser, coal, agriculture, food, food processing and human resource development to harmonise their expenditure and revenue patterns on a quarterly basis.
They said these ministries constituted around 20 per cent of the total expenditure of the Centre and a reversal of the trend of bunching expenditure in these ministries would significantly alter the annual trend of booking heavy expenditure by the Centre in the last two months of a financial year.
The officials also said the figure of 28 per cent compared favourably with the trend at the same point in May 2002.
They said this had been made possible because the departments had drawn up their spending plans early this year.
The officials said though funds were made available to ministries every year as soon as the Budget was passed, the departments took time to finalise their plans, which in turn delayed the projected expenses.
As a result, though the government had spent around Rs 4,04,013 crore in 2002-03 and would spend around Rs 4,34,000 crore in the current fiscal, which was more than 20 per cent of the annual gross domestic product, the impact on the economy was not substantial.
In 2001-02, nearly 40 per cent of the total Plan and non-Plan expenditure of the Centre was spent in the last two months of the fiscal.
To reverse this trend, in the Budget for 2003-04, Finance Minister Jaswant Singh had introduced a pilot quarterly cash management system in the central ministries.
He had said the finance ministry would release budgetary allocations in a time-sliced manner to permit convergence of available resources within the year.
The quarterly cash limits will avoid the mismatches between the receipts and expenditure and will reduce cash borrowing needs of the Centre.
The officials said if they could maintain the current trends, then other than interest and other time-bound expenditure, most of the discretionary expenditure of the Centre would be spaced out in four equal installments.
