EXPENDITURE: Innovative financing and cash management are the new mantra
Finance Minister Jaswant Singh has projected an 8.6 per cent increase in the government's expenditure to Rs 4,38,795 crore in the next financial year.
Of this, Rs 3,17,821 crore has been earmarked for non-plan expenditure, which is up 9.6 per cent from the current year's revised estimates (RE). Rs.120,974 crore has been allocated for plan expenditure, an increase of 6 per cent from the RE for 2002-03.
Claiming credit for a lower than budgeted expenditure in 2002-03, the FM said that the RE for the current fiscal was lower than the budget estimates (BE) by about Rs 6,296 crore despite additional expenditure on drought relief, food subsidy, and the Delhi Metro Rail Project.
The cut was due to lower interest payments (Rs 1,727 crore) as a consequence of lowering interest rates, lower defence expenditure (Rs 9,000 crore), non-plan grants to state governments (Rs 4,187 crore) and cuts in non-plan capital outlay (Rs 2,591crore).
On non-plan expenditure, interest payments are budgeted to go up by Rs 7,560 crore as compared to the revised estimates for 2002-03, subsidies by Rs 5,289 crore, defence expenditure by Rs 9,300 crore and grants to state governments by Rs 3,346 crore.
Defence expenditure has been increased to Rs 65,300 crore from the RE of Rs 56,000 crore. Emphasising the need for modernisation of the armed forces, Finance Minister, Jaswant Singh said that the government was committed to equipping them with the best available.
He also promised to make available any additional requirement emerging on account of modernisation needs of the three defence services, or on account of the Married Accommodation Project.
Expenditure on subsidies has been budgeted to go up by a sharp 12 per cent over the RE for 2002-03. The RE for the year, was also Rs 4766.5 crore higher than the BE for 2002-03.
On the plan expenditure side, the government has announced a Gross Budgetary Support (GBS) of Rs 1,20,974 crore for 2003-04. This is Rs 3,474 crore higher than the earlier announced GBS of Rs 1,17,500 crore.
The GBS is 6.6 per cent higher than the BE of Rs 1,13,500 crore for 2002-03.
Taking into account an inflation rate of 2.6 per cent during the year, this amounts to an increase of only 4 per cent over last years BE allocation in real terms, the lowest in over five years.
While the Finance Minister seeks to make up for the relatively lower hike in the GBS by introducing 'innovative funding mechanisms' to leverage public money through private sector partnership, the lack of success in introducing private players in infrastructure sector previously, seems to spell trouble for the government's plan to boost infrastructure growth and ultimately economic growth throught this route.
While states got Rs 45871 crore (RE) last year, they will get Rs 48,822.4 crore (BE) in 2003-04. Central ministries, which got Rs 68218.5 crore in 2002-03, will get Rs 72,151.6 crore in the coming fiscal.
