Explaining the difference between the government finances reported in the Economic Survey and the Union Budget 2019-20

Suyash Tiwari - July 10, 2019

The Finance Minister, Ms. Nirmala Sitharaman, presented the Union Budget for the financial year 2019-20 in Parliament on July 5, 2019. In the 2019-20 budget, the government presented the estimates of its expenditure and receipts for the year 2019-20. The budget also gave an account of how much money the government raised or spent in 2017-18. In addition, the budget also presented the revised estimates made by the government for the year 2018-19 in comparison to the estimates it had given to Parliament in the previous year’s budget.

What are revised estimates?

Some of the estimates made by the government might change during the course of the year. For instance, once the year gets underway, some ministries may need more funds than what was actually allocated to them in the budget, or the receipts expected from certain sources might change. Such deviations from the budget estimates get reflected in the figures released by the government at later stages as part of the subsequent budgets. Once the year ends, the actual numbers are audited by the Comptroller and Auditor General of India (CAG), post which they are presented to Parliament with the upcoming budget, i.e. two years after the estimates are made.

For instance, estimates for the year 2018-19 were presented as part of the 2018-19 budget in February 2018. In the 2019-20 interim budget presented in February 2019 (10 months after the financial year 2018-19 got underway), the government revised these estimates based on the actual receipts and expenditure accounted so far during the year and incorporated estimates for the remaining two months.

The actual receipts and expenditure accounts of the central government are maintained by the Controller General of Accounts (CGA), Ministry of Finance on a monthly basis. In addition to the monthly accounts, the CGA also publishes the provisional unaudited figures for the financial year by the end of the month of May. Once these provisional figures are audited by the CAG, they are presented as actuals in next year’s budget. The CGA reported the figures for 2018-19 on May 31, 2019.[1] The Economic Survey 2018-19 presented on July 4, 2019 uses these figures.[2]

The budget presented on July 5 replicates the revised estimates reported as part of the interim budget (February 1, 2019). Thus, it did not take into account the updated figures for the year 2018-19 from the CGA.

Table 1 gives a comparison of the 2018-19 revised estimates presented by the central government in the budget with the provisional unaudited figures maintained by the CGA for the year 2018-19.[3]

Table 1: Budget at a Glance: Comparison of 2018-19 revised estimates with CGA figures (unaudited) (Rs crore)

	Actuals 2017-18	Budgeted 2018-19	Revised 2018-19	Provisional 2018-19	Difference (RE 2018-19 to Provisional 2018-19)
Revenue Expenditure	18,78,833	21,41,772	21,40,612	20,08,463	-1,32,149
Capital Expenditure	2,63,140	3,00,441	3,16,623	3,02,959	-13,664
Total Expenditure	21,41,973	24,42,213	24,57,235	23,11,422	-1,45,813
Revenue Receipts	14,35,233	17,25,738	17,29,682	15,63,170	-1,66,512
Capital Receipts	1,15,678	92,199	93,155	1,02,885	9,730
of which:
Recoveries of Loans	15,633	12,199	13,155	17,840	4,685
Other receipts (including disinvestments)	1,00,045	80,000	80,000	85,045	5,045
Total Receipts (without borrowings)	15,50,911	18,17,937	18,22,837	16,66,055	-1,56,782
Revenue Deficit	4,43,600	4,16,034	4,10,930	4,45,293	34,363
% of GDP	2.6	2.2	2.2	2.4
Fiscal Deficit	5,91,062	6,24,276	6,34,398	6,45,367	10,969
% of GDP	3.5	3.3	3.4	3.4
Primary Deficit	62,110	48,481	46,828	62,692	15,864
% of GDP	0.4	0.3	0.2	0.3

Sources: Budget at a Glance, Union Budget 2019-20; Controller General of Accounts, Ministry of Finance; PRS.

The 2018-19 provisional figures for revenue receipts is Rs 15,63,170 crore, which is Rs 1,66,512 crore less than the revised estimates. This is largely due to Rs 1,67,455 crore shortfall in centre’s net tax revenue between the revised estimates and the provisional estimates (Table 2).

Major taxes which see a shortfall between the gross tax revenue presented in the revised estimates vis-à-vis the provisional figures are income tax (Rs 67,346 crore) and GST (Rs 59,930 crore). Non-tax revenue and disinvestment receipts as per the provisional figures are higher than the revised estimates.

Table 2: Break up of central government receipts: Comparison of 2018-19 RE with CGA figures (unaudited) (Rs crore)

	Actuals 2017-18	Budgeted 2018-19	Revised 2018-19	Provisional 2018-19	Difference (RE 2018-19 to Provisional 2018-19)
Gross Tax Revenue	19,19,009	22,71,242	22,48,175	20,80,203	-1,67,972
of which:
Corporation Tax	5,71,202	6,21,000	6,71,000	6,63,572	-7,428
Taxes on Income	4,30,772	5,29,000	5,29,000	4,61,654	-67,346
Goods and Services Tax	4,42,562	7,43,900	6,43,900	5,83,970	-59,930
Customs	1,29,030	1,12,500	1,30,038	1,17,930	-12,108
Union Excise Duties	2,59,431	2,59,600	2,59,612	2,30,998	-28,614
A. Centre's Net Tax Revenue	12,42,488	14,80,649	14,84,406	13,16,951	-1,67,455
B. Non Tax Revenue	1,92,745	2,45,089	2,45,276	2,46,219	943
of which:
Interest Receipts	13,574	15,162	12,047	12,815	768
Dividend and Profits	91,361	1,07,312	1,19,264	1,13,424	-5,840
Other Non-Tax Revenue	87,810	1,22,615	1,13,965	1,19,980	6,015
C. Capital Receipts (without borrowings)	1,15,678	92,199	93,155	1,02,885	9,730
of which:
Disinvestment	1,00,045	80,000	80,000	85,045	5,045
Receipts (without borrowings) (A+B+C)	15,50,911	18,17,937	18,22,837	16,66,055	-1,56,782
Borrowings	5,91,062	6,24,276	6,34,398	6,45,367	10,969
Total Receipts (including borrowings)	21,41,973	24,42,213	24,57,235	23,11,422	-1,45,813

Note: Centre’s net tax revenue is gross tax revenue less share of states in central taxes. Figures for GST include receipts from the GST compensation cess. Note that GST was levied for a nine-month period during the year 2017-18, starting July 2017.

Sources: Receipts Budget, Union Budget 2019-20; Controller General of Accounts, Ministry of Finance; PRS.

While the provisional figures show a considerable decrease in receipts (Rs 1,56,782 crore) as compared to the revised estimates, fiscal deficit has not shown a comparable increase. Fiscal deficit is estimated to be Rs 10,969 crore higher than the revised estimates as per the provisional accounts.

On the expenditure side, the total expenditure as per the provisional figures show a decrease of Rs 1,45,813 crore as compared to the revised estimates. Certain Ministries and expenditure items have seen a decrease in expenditure as compared to the revised estimates made by the government. As per the provisional accounts, the expenditure of the Ministry of Agriculture and Farmers’ Welfare and the Ministry of Consumer Affairs, Food and Public Distribution are Rs 22,133 crore and Rs 70,712 crore lower than the revised estimates, respectively. The decrease in the Ministries’ expenditure as a percentage of the revised estimates are 29% and 39%, respectively. The food subsidy according to CGA was Rs 1,01,904 crore, which was Rs 69,394 crore lower than the revised estimates for the year 2018-19 given in the budget documents.

[1] “Accounts of the Union Government of India (Provisional/Unaudited) for the Financial Year 2018-19”, Press Information Bureau, Ministry of Finance, May 31, 2019.

[2] Fiscal Developments, Economic Survey 2018-19, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter/echap02_vol2.pdf.

[3] Controller General of Accounts, Ministry of Finance, March 2018-19, http://www.cga.nic.in/MonthlyReport/Published/3/2018-2019.aspx.

Parliament

President’s Address 2014 to 2017: Plan vs. Performance

Roopal Suhag - February 6, 2017

Budget Session 2017 commenced with the President, Pranab Mukherjee, addressing a joint sitting of Parliament on January 31, 2017. This address by the President highlights the legislative and policy activities and achievements of the government in the previous year. In addition, it gives a broad indication of the government’s agenda for the year ahead. The address is followed by a motion of thanks that is moved in each House by ruling party MPs. This is followed by a discussion on the address and concludes with the Prime Minister replying to the points raised during the discussion.

In the lower house, the motion of thanks has begun today. It began in the upper house on February 2, 2017. Lok Sabha and Rajya Sabha have allocated two and three days for the discussion, respectively. In this context, we present an analysis of the salient points of the agenda proposed in the President’s address from 2014 to 2017 and the current status of its implementation.

Policy priority stated in the President’s address (2014 to 2017)

Current Status

Macroeconomy

GDP growth has made India the world’s fastest growing economies, among large economies.

Foreign exchange reserves have been at an all-time high, and inflation, current account deficit and fiscal deficit have consistently reduced since 2014.

The GDP is estimated to grow at 7.1% in 2016-17, compared to its growth of 7.9% in 2015-16.[i]

The Economic Survey 2016-17 has stated the GDP growth to be between 6.75% and 7.5% in 2017-18.[ii]

The average CPI inflation declined from 5.6% in December 2015 to 3.4% in December 2016.[iii] In the same period, food inflation also decreased from 6.4% from 1.4%.³

Current account deficit decreased from USD 14.7 billion in 2015-16 (April-September) to USD 3.7 billion in the corresponding period in 2016-17.[iv]

Foreign exchange reserves presently stand at Rs 24,54,950 crore, an increase of Rs 1,02,130 crore from 2016.[v]

Poverty eradication and financial inclusion

The Pradhan Mantri Jan Dhan Yojana was launched to provide universal access to banking facilities. The coverage under the scheme is close to 100%.

The proposed Postal Payment Bank of India will further boost financial inclusion.

Presently, around 27 crore accounts have been opened under the scheme.[vi] However, out of these, 25% of the accounts are zero balance accounts.⁶

The Indian Postal Payments Bank has started.[vii] The postal network with over 1.5 lakh post offices will also function as postal banks.⁷

Agriculture and water security

Pradhan Mantri Fasal Bima Yojana has expanded risk-coverage, doubled the sum insured, and facilitated low premium for farmers.

The government is also committed to implementation of Interlinking of Rivers Project.

Pradhan Mantri Fasal Bima Yojana has been implemented by 21 states.[viii] 3.66 crore farmers have been covered under the scheme, out of a total of 11 crore farmers in the country.[ix]

In April 2015, a Task Force was constituted on the Interlinking of Rivers Project.[x] The Task Force is yet to submit its report. The sub-Committee on restructuring the National Water Development Agency in September 2015 had recommended that a National Interlinking of Rivers Authority should be created through an Act of Parliament.[xi] So far, further steps have not been taken in this regard.

Energy

The Electricity (Amendment) Bill, 2014 has been introduced to bring reforms in the electricity sector.

Renewable energy capacity will manifold to 175 GW by 2022.

The Electricity (Amendment) Bill, 2014 is pending in the Parliament. The Standing Committee submitted its report on the Bill in May, 2015.[xii]

As of December 2016, 51 GW of renewable energy has been generated in the country.[xiii] However, in 2016-17, only 26% of the target of the generation of renewable energy could be achieved.¹³

Governance and legal reforms

Close to 1,800 obsolete legislation are at various stages of repeal.

My government is committed to providing 33% reservation to women in the Parliament and state Legislative Assemblies.

Amendments to the Prevention of Corruption Act are also on the anvil.

758 Appropriation Acts and 295 laws have been repealed.[xiv]^,[xv]

No Bill in relation to providing 33% reservation to women has been introduced yet.

The Prevention of Corruption (Amendment) Bill, 2013, is presently pending in Parliament. The Standing Committee and Rajya Sabha Select Committee have submitted their reports on the Bill.

Defence

One Rank One Pension scheme will be implemented.

Defence procurement procedure has been streamlined with a focus on indigenously designed, developed and manufactured weapon systems.

Recognising the importance of coastal security, the government will set up a National Maritime Authority.

The government will also build a National War Memorial to honour the gallantry of our soldiers.

The implementation of One Rank One Pension scheme has been initiated.[xvi] In 2016-17, Rs 12, 456 crore was allocated to the scheme.[xvii]

The Defence Procurement Policy 2016 added an additional category “Buy (Indian-Indigenously Designed, Developed and Manufactured) as the most preferred way of capital acquisition.[xviii]

The National Maritime Authority and National War Memorial are yet to be established.

Environment

Funds will be released to states and union territories for aggressive afforestation.

To conserve the Himalayan ecology, a National Mission on Himalayas will be launched.

Target for emission standards for motor vehicles has been drastically brought forward to achieve Bharat Stage –VI norm by 2021.

Parliament passed the Compensatory Afforestation Fund Bill, 2015 in July 2016.[xix] The Bill establishes the National Compensatory Afforestation Fund and a State Compensatory Afforestation Fund for each state. These Funds will be primarily spent on afforestation.

The National Mission on Himalayas is yet to be launched.

To make Bharat Stage-VI norms applicable by April 1, 2020, a draft notification was released in February 2016.[xx]

Rural and Urban Development

To develop 300 rural growth clusters across the country, Shyama Prasad Mukherji Rurban Mission has also been launched.

Mission Antyodaya, an intensive participatory planning exercise has been initiated.

Annual action plan for 500 cities with an outlay of Rs 50,000 crore has been approved.

To implement the Rurban mission, Rs 5,142 crore has been allocated for the period from 2015-16 to 2019-20.[xxi]

Under Mission Antyodaya, the release of funds has been lower than the allocated amount in the last three years, from 2014-15 to 2016-17.[xxii]

Under the Smart Cities Mission, Rs 4,572 has been released to 98 cities during the years 2015-16 and 2016-17.[xxiii]

Health

My government will formulate a New Health Policy and roll out a National Health Assurance Mission.

Pradhan Mantri Bharatiya Jan Aushadi Pariyojana has been launched to ensure that the poor have access to quality medicines at affordable prices.

A group was constituted in July 2014 to prepare a comprehensive background paper for the roll out of the National Health Assurance Mission.[xxiv] Further progress in this regard has not been made.

The draft National Health Policy was released in December 2014 for public comments and suggestions.[xxv] The Policy has not been finalised yet.

Under the Pradhan Mantri Bharatiya Jan Aushadi Pariyojana, Pradhan Mantri Bhartiya Janaushadhi Kendras are proposed to be opened in all 630 districts of the country.[xxvi]

Women and child development

A Bill to amend the Juvenile Justice Act has been introduced in Parliament to reform the law relating to juvenile offences.

The Juvenile Justice (Care and Protection of Children) Bill, 2014 was passed by Parliament in December 2015.[xxvii] The Bill permits juveniles between the ages of 16-18 years to be tried as adults for heinous offences.

[Sources: President’s Address to the Parliament from 2014 to 2017; PRS.]

For important highlights from the President’s address in 2017, please see here. For an analysis of the status of implementation of the announcements made in the 2016 address, please see here.

[i] “Press note on First Revised Estimates of National Income, 2015-16”, Ministry of Statistics and Programme Implementation, January 31, 2017, http://mospi.nic.in/sites/default/files/press_release/nad_PR_31jan17.pdf.

[ii] Economic Survey, 2016-17, http://finmin.nic.in/indiabudget2017-2018/e_survey.asp.

[iii] “Press Release Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the Month of December 2016”, Ministry of Statistics and Programme Implementation, January 12, 2017,http://mospi.nic.in/sites/default/files/press_release/CPI_PR12jan17th.pdf

[iv] “Developments in India’s Balance of Payments during the second quarter of 2016-17”, Reserve Bank of India, December 13, 2016, https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38884.

[v] “Developments in India’s Balance of Payments during the second quarter of 2016-17”, Reserve Bank of India, December 13, 2016, https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38884.

[vi] Progress Report, Pradhan Mantri Jan Dhan Yojana (Last accessed on January 24, 2017),http://www.pmjdy.gov.in/account.

[vii] “Cabinet approves setting up of India Post Payments Bank”, Cabinet, June 1, 2016.

[viii] “Achievements of Ministry of Agriculture and Farmers Welfare”, Ministry of Agriculture, January 2, 2016.

[ix] “Agricultural Statistics at a Glance 2015”, Department of Agriculture, Cooperation and Farmer’s Welfare, Ministry of Agriculture and Farmer’s Welfare, http://eands.dacnet.nic.in/PDF/Agricultural_Statistics_At_Glance-2015.pdf.

[x] “Task Force on Interlinking Rivers Constituted”, Press Information Bureau, Ministry of Water Resources, April 14, 2015.

[xi] Special Committee for Interlinking of Rivers, National Water Development Agency,http://www.nwda.gov.in/writereaddata/ilr/notification.pdf.

[xii] Report No. 4, Standing Committee on Energy, ‘The Electricity (Amendment) Bill, 2014’, Lok Sabha, May 2015, Standing Committee on Energy, http://www.prsindia.org/uploads/media/Electricity/SC%20report-Electricity.pdf.

[xiii] “Physical Progress (Achievements)”, Ministry of New and Renewable Energy, March 30, 2015,http://mnre.gov.in/mission-and-vision-2/achievements/.

[xiv] Appropriation Acts (Repeal) Act, 2016, http://lawmin.nic.in/ld/Act22of2016AppropriationActsrepeal.pdf.

[xv] Repealing and Amending Act, 2016, http://lawmin.nic.in/ld/Act23of2016RepealingandAmending.pdf.

[xvi] 12(1)/2014/D (Pen/PoI)- Part II, Government of India, Ministry of Defence, Department of Ex- Servicemen Welfare, November 7, 2015, http://www.desw.gov.in/sites/upload_files/desw/files/pdf/OR OP-DESW-MOD.pdf.

[xvii] Lok Sabha Unstarred Question 1696, Ministry of Defence, November 25, 2016,http://164.100.47.190/loksabhaquestions/annex/10/AU1696.pdf.

[xviii] “Year End Review 2016”, Ministry of Defence, December 31, 2016,http://pib.nic.in/newsite/PrintRelease.aspx?relid=156049.

[xix] The Compensatory Afforestation Fund Act, 2016,http://www.prsindia.org/uploads/media/Compensatory%20Afforestation/CAMPA%20act,%202016.pdf.

[xx] Rajya Sabha Unstarred Question No 82, Ministry of Road Transport and Highways, April 25, 2016.

[xxi] Rajya Sabha Unstarred Question No 914, Department of Rural Development, May 2, 2016 ,http://164.100.47.234/question/annex/239/Au914.pdf.

[xxii] Lok Sabha Unstarred Question No 4443, Ministry of Housing and Urban Poverty Alleviation, December 14, 2016, http://164.100.47.190/loksabhaquestions/annex/10/AU4443.pdf.

[xxiii] Lok Sabha Unstarred Question No 199, Ministry of Urban Development, November 16, 2016,http://164.100.47.190/loksabhaquestions/annex/10/AU199.pdf.

[xxiv] “Rolling out of National Health Assurance Mission”, Press Information Bureau, Ministry of Health and Family Welfare, July 15, 2014.

[xxv] Draft National Health Policy 2015, December 2014, Ministry of Health and Family Welfare,http://www.mohfw.nic.in/showfile.php?lid=3014.

[xxvi] Pradhan Mantri Bharatiya Jan Aushadi Pariyojana guidelines,http://janaushadhi.gov.in/data/Individuals_December_2016.pdf.

[xxvii] The Juvenile Justice (Care and Protection of Children) Act, 2015,http://www.prsindia.org/uploads/media/Juvenile%20Justice/Juvenile%20Justice%20Act,%202015.pdf.

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Explaining the difference between the government finances reported in the Economic Survey and the Union Budget 2019-20

President’s Address 2014 to 2017: Plan vs. Performance

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