Deviation in actuals from Budgetary estimates :

Some key observations are:

· While Non Plan Expenditure has generally exceeded Budgetary estimates, Plan Expenditure has often been used as the counterbalancing factor to keep the deficit in check. '99-00 was the only exception. Even in the eight months ended November 2000, Plan Expenditure has grown at just over 6% as against the budgeted growth of 11%.

· In the last few years, spending on Capital expenditure has exceeded the estimates; but most of this has been on the non-plan side.

Budgetary estimates and interim statement (Rsbn) :

* = For the period April-October, # = for the period April-November

But the means are not enthusing: A cursory glance would reveal that the control over the deficit has been achieved by reining in expenditure. Total receipts appear to be heading very close to the Budgeted figure, (estimated at 17% over the revised figures as against a budgeted figure of +14%). As opposed to a target of 13% over the actual figure for the previous year, growth in total expenditure, estimated at just 7.6%, could come as a major surprise.

Trend of revenue and fiscal deficit (as %GDP) :

Non-plan revenue expenditure (Interest payments, defense spending and subsidies) continues to be a sticky customer (it is just 2% below the target for the current fiscal). Much of the savings has been affected in the Budgetary support to states and capital expenditure (primarily a 14% cut in non-plan capital expenditure). Thus, the brunt of the expenditure cuts has fallen on developmental expenditure. Clearly, successive Finance Ministers, in their quest for pruning fiscal deficit, are sowing the seeds of a slowdown in future economic growth due to this scaling down.