Explainer: What is the actual spending by various Central Government Departments in 2017-18﻿
Sai Krishna Muthyanolla
July 25, 2019
In an earlier article, we looked the actual expenditure by the government compared to estimates. In this piece, we look at some key departments namely Agriculture, Defence, Health & Family Welfare, Revenue, New & Renewable energy and the trend in actual expenditure Vs estimates.
In every Union Budget, theGovernment of India makes provision for the expenditure during the nextfinancial year. In the earlier article, we learnt that the financeministry makes these budget allocations based on the requests received fromeach of the ministries after due consultation.
A good portion of the expendituregoes into the different schemes sponsored and run by the central government. Wedid a detailed study of the estimated expenditure for 2017-18 and the actualexpenditure on the central government schemes in the earlier article. We would now focus on the estimatedexpenditure for 2017-18 in some of the important departments/ministries and theactual figures for the year.
Actual Revenue
expenditure is higher while Capital expenditure is lower than estimates
The estimated total expenditure of
Ministries & Departments for 2017-18 was ₹ 21,46,734 crores, but the actual expenditure was marginally lower with ₹ 21,41,973 crores being spent.  Theactual Revenue expenditure was more i.e. ₹ 18,78,833 crores when compared to the estimate expenditure of ₹ 18,36,933 crores. However, the actual capital expenditure was lower at ₹ 2,63,139 crores compared to the estimated expenditure of ₹3,09,800 crores.
The expenditure on the schemes sponsored by central governmentand the central sector schemes form a major share of the central government’sexpenditure, with the other two major heads being (i) Establishment Expenditureof the Centre (ii) Other Central Sector Expenditure.
We have covered in detail the estimates vs actuals for 2017-18 of thecentral government schemes in an earlier explainer article.  Let us have a quick look at theestimates and actuals for the other two heads of expenditure.
The actual ‘Establishment Expenditure’ of the Centre is higher than theestimated expenditure for the year 2017-18, because the increase in the revenueexpenditure by ₹ 35657 crores than estimated. The establishment expenditure includes  salaries, medical expenses, wages, overtimeallowances, foreign travel expenses, domestic travel expenses, office expenses,materials and supplies, publications, advertising and publicity, training,other administrative expenses, POL, cost of ration, clothing and tentage,professional services, rent rates and taxes, royalty, pensionary charges,rewards and minor works, motor vehicles, information technology etc.
Even under the “Other Central Sector Expenditure”, the actualexpenditure is higher than the Estimated expenditure for the year 2017-18. Theactual revenue expenditure is in excess of ₹ 10,822 crores than theestimated. However, the actual capital expenditure was only 45% of the estimates.The actual capital spending is ₹ 5,754 crores compared to the estimated expenditure of ₹ 12,904 crores. Theexpenditure items under this head include provisions made for the Centralexpenditure on PSUs, autonomous bodies etc. and other expenditure not coveredin the category of schemes or establishment expenditure.
It has to be noted that Capital expenditure relates to either creationof an asset or paying off a debt, whereas revenue expenditure is a currentexpenditure which includes administration costs and other expenditure. Underboth the above mentioned heads, it can be observed that there is an excessamount spent on such revenue expenditure at the cost of lower spending on the allocationfor capital expenditure.
The expenditure outlay in the Union Budget is spread across 100Ministries/Departments. In this story, we look at the actual expenditure of fewof the key Ministries/Departments compared to the estimates for 2017-18.
Department of Agriculture – Actual expenditure on Centrally sponsored schemes
19% less than the estimates
The total estimates of expenditure under “Department of Agriculture, Cooperation and Farmers’ Welfare ‘is ₹ 41,855 crores whereasthe actual expenditure for 2017-18 is ₹ 37,396 crores i.e. nearly 10.65 % less than the estimate.   The actual spending on Centrally sponsoredschemes is 19% less than the estimated expenditure.
Central sponsored schemes like the Pradhan Mantri Krishi Sinchai Yojna (PMKSY),Rashtriya Krishi Vikas Yojna, National Food Security Mission, National Missionon Horticulture, National Project on Soil Health and Fertility, IntegratedScheme on Agriculture Marketing etc. are few the schemes whose actualexpenditure for 2017-18 was less than the estimates.
Ministry of Defence – Actual Capital Expenditure more than the estimates
The actual capital expenditure in the Ministry of Defence  was higher than the estimates for 2017-18 across all the three services of Indian Armed Forces – Army, Navy andAirforce. However, the actual expenditure on other heads i.e. OrdinanceFactories, R&D are less than the estimates. Although estimate allocationwas done for Technology Development to the tune of ₹ 44.63 cores, there wasno actual expenditure under this head. The total actual expenditure is ₹ 90,438.4 crores whichis ₹ 3,950.39 crores morethan the estimated numbers for 2017-18. Purchase of equipment and machinery isformed a major part of the capital outlay, followed by construction works.
Even in the case of revenue expenditure in the Ministry of Defence, forsalaries, pensions etc., the actual expenditure is around ₹ 9340 crores more thanthe estimates for 2017-18.
Department of Health and Family Welfare –
Actual expenditure more than estimates under Centre’s support for Immunization
and Pulse Polio program
The estimated expenditure for Department of Health and FamilyWelfare was ₹ 47,352 crores, however the actual expenditure is to the tune of ₹ 51,381 crores. While most of the heads under the department did notshow much variance between the estimated expenditure and actual expenditure,the major difference was the excess actual expenditure under National RuralHealth mission.
National Rural Health Mission (NRHM) is aCentrally sponsored Scheme focussed on improving the health conditions in theRural areas. Under this mission, the Centre contributes for a Pool fund whichincludes programmes such as immunization, pulse polio programme, Iodinedeficiency disorders control programme etc. The estimated expenditure for thispool fund was ₹ 4,566 crores, while the actualexpenditure overshot the estimate by ₹3,073 crores (actual amount : ₹ 7640 crores). In other words, the actual expenditure on NRHM is 65% morethan the estimates.
Department of Revenue: Excess actual
expenditure due to GST Compensation Fund
The estimate of expenditure for Revenue Department in theMinistry of Finance for year 2017-18 was only ₹ 500 which was majorly towards the establishment expenditure of theCentral Government. However during 2017-18 , the Central Government hasimplemented Goods & Services Tax. Hence, as a compensation to thestates, ₹ 56,146 crores was transferred to Compensation for GST Fund.
Therefore the actual total expenditure of Department of Revenue for theyear 2017-18 was ₹ 58,117 crores due to the transferof money to the GST compensation fund.
Ministry of New and Renewable Energy- Actual expenditure
less than estimates for Solar Energy under Central Sector Schemes
Investment into New and renewable Energyresources is a critical aspect for National development through securing energysecurity. Non-renewable resources are not only running out but are also harmfulfor the environment. Hence the focus of any progressive nation is to findalternate and sustainable energy sources. Solar Energy, Wind Energy, Hydropower and other green alternatives are classified as renewable energy sources.
As a step in the right direction, CentralGovernment has estimated an expenditure of ₹ 5472 crores. However, the actual expenditure by the department for 2017-18 is only₹ 3644 crores. The difference between the estimate and actual is due to lowerexpenditure in the case of solar energy under Central Sector Scheme of GridInteractive Renewable Power. The estimate expenditure was ₹ 2661 crores while the actual expenditure for 2017-18 is ₹ 1001 crores i.e. only 37.63% of the estimated expenditure.
Increase in revenue and administrative
expenditure at cost of Govt schemes and Capital estimates
The departments highlighted in the article areamong the 100 different departments for which the Union budget allocates funds inthe budget. These departments had larger variance between the estimates andactuals. Few of the departments did not utilise the funds allocated as part of budget2017-18 with the actual numbers being lower than estimates. Few otherdepartment have incurred a greater expenditure than what was estimated. Acommon trend among most of such department is the excess of revenue expenditureespecially administrative expenses. This in turn has effected the designatedexpenditure for capital expenditure and in few cases also impacted the fundsfor central schemes.