The Centre's expenditure is set to rise by 26 per cent in FY2009 over 2008 a well known think-tank said in its monthly review here.
The government's expenditure is 26 per cent more than the actual expenditure in FY08. The 26 per cent increase is the highest-ever since 1980-81, the Centre for Monitoring Indian Economy (CMIE) said.
Following a spurt in subsidies in fertiliser and food, the government's budgeted expenditure for 2008-09 stood revised upwards at Rs 8,98,976 crore from Rs 7,50,884 crore budgeted in February 2008.
The two supplementary demands for grants of Rs 1,05,612 crore and Rs 42,480 crore approved by Parliament in October and December, respectively, pushed up the government expenditure in fiscal 2009. The revised expenditure is 19.7 per cent higher than the budget estimates.
As a percentage of GDP, expenditure for FY2009 works out to 16.5 per cent. This ratio is the highest in the recent five years. Earlier in FY03 and FY04, this ratio had reached 16.8 per cent and 17.1 per cent, respectively, CMIE said.
Factors that led to the spike in central government's expenditure include a spurt in subsidy on fertiliser and food, implementation of the Sixth Pay Commission recommendations, debt-waiver scheme for farmers and the stimulus packages for the economy, CMIE said.
