Reform? What reform? We could be excused for asking the question after studying the trends of expenditure in the Union budget. The table given tells the whole story. An analysis of the trends in government expenditure shows that the proportion of unproductive expenditure in revenue receipts has increased since 1989-90.

The table shows that unproductive expenditure on account of interest payments, defence, and subsidies have increased from 81.55 per cent of revenue receipts in 1989-90, before the liberalisation programme started, to 90.79 per cent (revised estimates for 1998-99). That means for every rupee earned, 90.79 paise was spent unproductively in 1997-98. It also means that there is only 9.21 paise available for all the other programmes of the government -- rural development, health, poverty eradication and other programmes which only the government can undertake. Even the optimistic budget estimates for 1999-2000 project unproductive expenditure to go down onlymarginally, to 86.17 per cent.

While the proportion of expenditure on subsidies and defence has come down, the percentage of funds going to service debt has been continually increasing. So much so that interest payments have increased from 33.95 per cent of revenue receipts to 49 per cent (revised estimates for 1998-99). But there has been slow but steady progress on pruning the subsidy component. Subsidies as a proportion of total revenue receipts have been reduced from 20.03 per cent in 1989-90 to 15.66 per cent (1998-99 revised estimates).Not that there haven't been attempts to rectify the situation. The budgeted estimates for 1997-98, for instance envisaged a reduction in unproductive expenditure to 79.73 per cent. Unfortunately, reality was very different.It will be noticed from the table that the sharp contraction in the fiscal deficit in 1991-92 and 1992-93 bore fruit, and unproductive expenditure was brought down from 89.31 per cent of revenue receipts in 1990-91 to 81.82 per cent. However, the risein the fiscal deficit to 7.4 per cent of GDP in 1993-94 had an adverse effect, and the proportion of unproductive expenditure increased to a high of 94.45 per cent that year. Thereafter, the boom years from 1994-95 to 1996-97 saw a correction, only to sharply deteriorate in 1997-98, when the deficit reached 6.2 per cent of GDP. The position further deteriorated this fiscal, according to the revised estimates, with the massive increase in Government borrowing.