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Road Ministry leads spending in April-June

Shishir Sinha New Delhi | Updated on August 01, 2021

Spending for Road Ministry stood at 42 per cent of BE

The Road Ministry has front loaded the expenditure of its Budget allocation (BE) for the fiscal year 2021-22 in April-June quarter, while three Ministries – Labour, Tourism and Social Justice & Empowerment – managed to spend just 3 per cent of their BE in the three months.

Positive impact

Experts feel with pandemic affecting economic activities and investment by the private sector being low, government expenditure, if stepped up, will aid economic recovery. Data from Controller General of Accounts shows, of the 57 Central Ministries and Departments, 28 showed higher expenditure in April-June quarter in comparison to the corresponding period of last fiscal, while 27 registered decline and for two, expenditure as a percentage of BE remained same. Road Ministry led the expenditure table with spending at 42 per cent of BE of over ₹1.18-lakh crore. For the first quarter of FY21, the figure stood at 21 per cent. A notable feature here is that capital expenditure jumped to 43 per cent of BE from 21 per cent.

Higher capital expenditure means more roads were constructed during the period as the activity was exempted from local lockdowns.

Health & Family Welfare Ministry saw a decline to 25 per cent from 32 per cent. Even in absolute terms, it came down to around ₹18,700 crore from over ₹21,500 crore.

One reason could be lower spending on vaccines by the Centre as half of the procurement till June 20 was done by States, UTs and private hospitals. Meanwhile, expenditure for Rural Development Ministry saw a sharp fall to 32 per cent from 72 per cent. Since first quarter of the last fiscal saw higher spending on MGNREGA after reverse migration and other welfare programmes.

Varied patterns

Sunil Kumar Sinha, Principal Economist with India Ratings & Research, said that expenditure pattern of ministries/departments vary a lot. Nine ministries/departments such as Commerce and Industry, Department of Posts, Food and Public Distribution, Mines, Road Transport and Highways, Rural Development, Scientific and Industrial Research, Statistics and Programme Implementation and Steel, have already spent more than 25 per cent of their FY22 budget in April-June quarter.

On other hand, 21 ministries/departments such as Consumer Affairs, Electronics and Information Technology, Environment, Forest, and Climate Change; Economic Affairs, Financial Services, Indirect Tax, Fisheries, Heavy Industries, Cabinet (demand for grants under the Ministry of Home Affairs), Ladakh (demand for grants under the Ministry of Home Affairs), Labour and Employment; Minority Affairs, New and Renewable Energy, Parliamentary Affairs, Ports, Shipping and Waterways, Land Resources, Biotechnology, Skill Development and Entrepreneurship, Social Justice and Empowerment, Empowerment of Persons with Disabilities and Tourism have spent only up to 10 per cent of their FY22 budget.

“Presently, when corporate investment and private expenditure demand is muted, government expenditure and net exports are major growth drivers of economy,” he said.

 

Published on August 01, 2021

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