Budget 2019: Govt spending to shoot up by over Rs 3 lakh crore this year; here’s why

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Updated: June 26, 2019 12:08:19 PM

Union Budget 2019: Three items: grants and loans to states, interest payment and agriculture alone account for more than two-third of the total increase in the govt's expenditure this year.

Union Budget 2019The Union government has estimated its total expenditure to rise by Rs 3.27 lakh crore this year.

India Budget 2019: The Union government’s total expenditure is estimated to rise by over Rs 3 lakh crore this year in comparison with the previous year. According to the interim budget presented by former finance minister Piyush Goyal, the total expenditure of Union government is estimated to be Rs 27.84 lakh crore in FY 2019-20, a jump of Rs 3.27 lakh crore over the previous year’s expenditure. According to the latest information given in this year’s interim budget, this increase is attributed to more than a dozen items like increase in the grants and loans given to states and government’s interest payment liabilities. However, a careful examination of this data would reveal that only three items account for more than two-third of the total increase in the Union government’s expenditure this year.

Grants and loans to be given to states in the current financial year account for the biggest chunk of rise in the Union government’s expenditure this year. These grants and loans are set to rise from Rs 3.91 lakh crore in 2018-19 to Rs 4.72 lakh crore in 2019-20, an increase of over Rs 81,000 crore.

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Similarly, the government has estimated its interest payment outgo to rise from Rs 5.87 lakh crore in 2018-19 to Rs 6.65 lakh crore this year, an increase of over Rs 77,000 crore. The third biggest component of this increase comes from the department of agriculture co-operation and farmers’ welfare as the government increased the allocation from Rs 67,800 crore to over Rs 1.29 lakh crore, an increase of Rs 61,785 crore.

These three items alone account for a total increase of nearly Rs 2.21 lakh crore, more than two third of the total increase of Rs 3.27 lakh crore in the Union government’s total expenditure in 2019-20.

According to the interim budget, the other factors that will contribute to this increase in the total expenditure this year are: subsidies (Rs 21,951 crore), defence (Rs 19,873 crore), food subsidy (Rs 12,922 crore), capital expenditure other than defence (Rs 12,108 crore), pensions (Rs 7,682 crore), health and family welfare (Rs 6,663 crore), education (Rs 2,808 crore), grants and loans to union territories (Rs 1503 crore) and other expenditure (Rs 16,267 crore).

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