Government’s policy think tank arm, NITI Aayog, has proposed a higher budgetary spend on sectors that would otherwise not see massive investments from the private sector.

In its Three-Year Action Agenda for fiscal 2017-2018 to 2019-2020, it has suggested “shifting the composition of expenditures by allocating a larger proportion of additional revenues that become available over time to high-priority sectors.”

The sectors include education, health, agriculture, rural development, defence, railways, roads and other categories of capital expenditure.

Investments in machinery, fertiliser and steel have been named sectors that crowd out investments in activities such as railways, ports, irrigation, power and digital connectivity.

The proposed agenda also notes that the share of non-developmental revenue expenditure in total revenue expenditure would decline from 47 per cent in 2015-16 to 41 per cent in 2019-20. At the same time, the share of capital expenditure, which is more likely to promote development, would rise significantly.

Expenditure framework

NITI Aayog has also proposed adopting a Medium-Term Expenditure Framework (MTEF). It said the Centre’s Budget is set for an annual horizon. “The room for realignment in one year is limited and the temptation in a one-year-horizon Budget is to expand all expenditures more or less radially.”

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