Fisc loses 14.4% more to subsidies & interest flows

NEW DELHI: The government’s non-Plan expenditure in April-December 2006-07 jumped 14.4% compared to the corresponding period in the previous fiscal. In 2005-06, the non-Plan expenditure component registered a negative growth of 3.1% over the corresponding period in 2004-05.

The higher non-Plan expenditure of the government this fiscal indicates that a large amount of the exchequer’s funds are being exhausted for the payment of interest and subsidies.

According to data compiled by the controller-general of accounts, non-Plan expenditure for April-December 2006 stood at Rs 2,72,203 crore against Rs 2,37,904 crore in the corresponding period of the previous fiscal, a Press release issued by the finance ministry says. Interest payments at Rs 92,634 crore account for 34.03% of the total non-Plan expenditure incurred during April-December 2006.

While the government’s Plan expenditure consists of central and state Plan allocations, non-Plan expenditure includes interest payments, subsidies, defence expenditure and pension outlays, among others. The government’s Plan expenditure for April-December 2006-07 increased 17.9% compared to the corresponding period last year, from Rs 94,595 crore to Rs 1,11,518 crore.

Both revenue deficit and fiscal deficit in the given period showed a significant decline from the April-December period in the previous fiscal. Fiscal deficit — defined as the excess of government expenditure over receipts after taking into account government borrowings — fell 12.4% from Rs 1,08,334 crore to Rs 94,854 crore.

The revenue deficit — excess of revenue expenditure over revenue receipts — declined by a steep 16.2% in April-December 2006 compared to the previous fiscal.