Bucking the trend of spending compression in the last few years, the Centre is poised to achieve the targeted Plan expenditure level of `4.65 lakh crore in 2015-16. In the first three quarters of the year, it spent 75% of the Plan outlay for the full year, signalling likely even utilisation of the funds through the year.
While this is partly because of the realistic estimate made at the beginning of the year in the wake of the huge slippage last year — actual plan spending in 2014-15 was `4.54 lakh crore, down 21% from the budget estimate (BE) -, accelerated use of allocated funds by a clutch of ministries indeed helped in keeping the pace. The ministries lived up to the expectations of the Modi government by contributing in large measure to its efforts to enhance its public (capital) spending.
Going by the figures for the April-December period, among the conventionally high-spender ministries, rural development, HRD, urban development and health propped up the spending in order to be able to meet the yearly targets. Also, despite substantial increases in their Plan funds this year, the ministries of road transport and highways and railways are likely to achieve their respective targets for the current fiscal. The finance ministry which saw a steep reduction in its Plan outlay this year due to the revamp of the centrally sponsored schemes and higher transfers to states will likely get to the easier target. The women and child development ministry spent 111% of its FY16 Plan outlay in April-December itself but that was because its allocation was slashed in the previous Budget. The agriculture ministry was an obvious laggard among the large ministries, as its utilisation against the allocation in April-December this year dipped despite the outlay itself being significantly lower than last year.
Plan spending is budgeted to account for over 56% of the total (plan and non-plan) capital spending in 2015-16. Over 29% or `1.35 lakh crore of the Plan spending is projected to used for capital assets creation. The FY16 budget allocated `1.35 lakh crore for the Plan capital spending, or a 41% jump over the actuals of the previous year. Actual spending up to December indicate that the government has front-loaded capital spending, which stood at 85% of the full-year target as compared to 58%, achieved in the year-ago period of the corresponding target.
Despite a likely shortfall in disinvestment proceeds and direct tax revenue and challenges from lower nominal GDP growth, finance minister Arun Jaitley has said the Centre would meet the expenditure target for FY16.