[Union Budget 2018-19] Anticipated allocations to various sectors

[Union Budget 2018-19] Anticipated allocations to various sectors

Union budget is a comprehensive statement of the government's finance including spending, revenues, deficit or surplus, and debt, for the fiscal year that runs from April 1 to March 31. It is a statement of estimated receipts and expenditure of the government for every financial year. Budget plays a very important role in an economy since it is a framework on which government applies the policies related to revenue and expenditure. It helps the economy to identify the weaknesses and work in an efficient way. Government budget is a broad concept comprising of:
  1. Revenue budget: The current receipts of the government and the expenditure that can be met from these receipts.
  2. Capital budget: The requirements of the government and the method of their financing.
  3. Revenue deficit refers to the excess of revenue expenditure over revenue receipts.
  4. Fiscal deficit is the difference between the Revenue receipts plus Non-debt Capital Receipts (NDCR) and the total expenditure. This indicates the total borrowing requirements of Government from all sources.

Allocation of budget based on shares 

Since in every year the share remains almost same. For example, in tab le 1, “Interest Payments”, was 441658.9 during 2015-16, 483068.9 in 2016-17 and 523078.4 in 2017-18. There is no significant change in shares in this department since the interest payments are always given higher shares compared to other sectors every year, and it is obvious that the same trend would be followed in future too. If this criteria is followed, the budget 2018-19 will also have the following sectors on top priority with highest budget allotment as shown in table 2.

Table 1 : Expenditure of Ministries and departments
Table 2 : Rank based on shares by each sector
From table 2, it is evident that the following sectors are allocated major shares:
  1. Interest Payments 
  2. Infrastructure 
  3. Defence services
  4. Department of Food and Public Distribution 
  5. Transfer to States
The sectors like interest payments, transfer to states, pension etc. come under committed expenses, which are having no returns and are planned beforehand, hence these sectors are excluded from this analysis. Budget plays a very important role because it is a framework on which government applies the policies related to revenue and expenditure. It helps the economy to work in an efficient way and to identify the weakness. The remaining sectors include:
  1. Infrastructure 
  2. Defence services
  3. Department of Food and Public Distribution
  4. Department of Rural Development 
  5. Capital Outlay on Defence Services 
In the above mentioned sectors it is observed that the share for infrastructure was more, followed by Defence services, Department of Food and Public Distribution, Department of Rural Development and Capital Outlay on Defence Services. It is almost obvious that this trend will be followed in the upcoming budget 2018-19 too, as there is no significant difference in shares of each sector for the past 3 years, as shown in fig 1.

Figure 1: Sector-wise % Allocation (2015-18)

The annual percentage growth of few sectors out of 100 different sectors is calculated and compared for the last three year budgets. This method was adopted to examine whether there is any boost in any particular sector for the last year in terms of percentage. In this case only individual percentage change matters. In table 3, percentage growth in allocation for last years are mentioned,

Table 3: Sector-wise percentage growth in allocation

The fig. 2 is the graphical representation of table 3, which shows the sectors having an increase in allocation of budget and vise-versa.

Table 4: Percentage growth in allocation

From the fig.2, it is clearly that the following sectors are getting a boost in allocation of budget for the past 3 years (Modi. Govt.);
  1. Agriculture sector, the rate of growth of allocation is 1.23%, which is the highest among other sectors.
  2. Defence Services, The rate of growth of allocation is 0.62%, which is far behind that of agriculture sector.
  3. Department of Urban Development, The rate of growth of allocation is 0.61%.
  4. Defence Pensions, The rate of growth of allocation is 0.58%.
  5. Infrastructure, The rate of growth of allocation is 0.51, which includes roads, railways etc.

Conclusion

Wrapping up all, Union budget of India is one of the most important policy for allocating budget across many sectors in India. While analyzing past three years data, it is observed that sectors like interest payments, infrastructure, defence services get the highest shares; With regard to shares of sectors which have shares other than committed expenditure, then infrastructure, defence service, department of food and public distribution gets the highest shares; When percentage growth of allocation of budget is the criteria, it’s another deal, agriculture sector, defence sector, department of urban development, have the highest figures.
More From Author