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.

Earlier this month, guidelines for the Swachh Bharat Mission (Gramin) were released by the Ministry of Drinking Water and Sanitation.  Key features of the Swachh Bharat Mission (Gramin), as outlined in the guidelines, are detailed below.  In addition, a brief overview of sanitation levels in the country is provided, along with major schemes of the central government to improve rural sanitation. The Swachh Bharat Mission, launched in October 2014, consists of two sub-missions – the Swachh Bharat Mission (Gramin) (SBM-G), which will be implemented in rural areas, and the Swachh Bharat Mission (Urban), which will be implemented in urban areas.  SBM-G seeks to eliminate open defecation in rural areas by 2019 through improving access to sanitation.  It also seeks to generate awareness to motivate communities to adopt sustainable sanitation practices, and encourage the use of appropriate technologies for sanitation. I. Context Data from the last three Census’, in Table 1, shows that while there has been some improvement in the number of households with toilets; this number remains low in the country, especially in rural areas. Table 1:  Percentage of households with toilets (national)

Year Rural Urban Total
1991 9% 64% 24%
2001 22% 74% 36%
2011 31% 81% 47%

In addition, there is significant variation across states in terms of availability of household toilets in rural areas, as shown in Table 2.  Table 2 also shows the change in percentage of rural households with toilets from 2001 to 2011.  It is evident that the pace of this change has varied across states over the decade. Table 2: Percentage of rural households with toilets

State

2001

2011

% Change

Andhra Pradesh

18

32

14

Arunachal Pradesh

47

53

5

Assam

60

60

0

Bihar

14

18

4

Chhattisgarh

5

15

9

Goa

48

71

23

Gujarat

22

33

11

Haryana

29

56

27

Himachal Pradesh

28

67

39

Jammu and Kashmir

42

39

-3

Jharkhand

7

8

1

Karnataka

17

28

11

Kerala

81

93

12

Madhya Pradesh

9

13

4

Maharashtra

18

38

20

Manipur

78

86

9

Meghalaya

40

54

14

Mizoram

80

85

5

Nagaland

65

69

5

Odisha

8

14

6

Punjab

41

70

30

Rajasthan

15

20

5

Sikkim

59

84

25

Tamil Nadu

14

23

9

Tripura

78

82

4

Uttar Pradesh

19

22

3

Uttarakhand

32

54

23

West Bengal

27

47

20

All India

22

31

9

II. Major schemes of the central government to improve rural sanitation The central government has been implementing schemes to improve access to sanitation in rural areas from the Ist Five Year Plan (1951-56) onwards.  Major schemes of the central government dealing with rural sanitation are outlined below.

Central Rural Sanitation Programme (1986): The Central Rural Sanitation Programme was one of the first schemes of the central government which focussed solely on rural sanitation.  The programme sought to construct household toilets, construct sanitary complexes for women, establish sanitary marts, and ensure solid and liquid waste management.
Total Sanitation Campaign (1999): The Total Sanitation Campaign was launched in 1999 with a greater focus on Information, Education and Communication (IEC) activities in order to make the creation of sanitation facilities demand driven rather than supply driven. Key components of the Total Sanitation Campaign included: (i) financial assistance to rural families below the poverty line for the construction of household toilets, (ii) construction of community sanitary complexes, (iii) construction of toilets in government schools and aganwadis, (iv) funds for IEC activities, (v) assistance to rural sanitary marts, and (vi) solid and liquid waste management.
Nirmal Bharat Abhiyan (2012): In 2012, the Total Sanitation Campaign was replaced by the Nirmal Bharat Abhiyan (NBA), which also focused on the previous elements.  According to the Ministry of Drinking Water and Sanitation, the key shifts in NBA were: (i) a greater focus on coverage for the whole community instead of a focus on individual houses, (ii) the inclusion of certain households which were above the poverty line, and (iii) more funds for IEC activities, with 15% of funds at the district level earmarked for IEC.
Swachh Bharat Mission (Gramin) (2014): Earlier this year, in October, NBA was replaced by Swachh Bharat Mission (Gramin) (SBM-G) which is a sub-mission under Swachh Bharat Mission.  SBM-G also includes the key components of the earlier sanitation schemes such as the funding for the construction of individual household toilets, construction of community sanitary complexes, waste management, and IEC. Key features of SBM-G, and major departures from earlier sanitation schemes, are outlined in the next section.

III. Guidelines for Swachh Bharat Mission (Gramin) The guidelines for SBM-G, released earlier this month, outline the strategy to be adopted for its implementation, funding, and monitoring. Objectives: Key objectives of SBM-G include: (i) improving the quality of life in rural areas through promoting cleanliness and eliminating open defecation by 2019, (ii) motivating communities and panchayati raj institutions to adopt sustainable sanitation practices, (iii) encouraging appropriate technologies for sustainable sanitation, and (iv) developing community managed solid and liquid waste management systems. Institutional framework: While NBA had a four tier implementation mechanism at the state, district, village, and block level, an additional tier has been added for SBM-G, at the national level.  Thus, the implementation mechanisms at the five levels will consist of: (i) National Swachh Bharat Mission (Gramin), (ii) State Swachh Bharat Mission (Gramin), (iii) District Swachh Bharat Mission (Gramin), (iv) Block Programme Management Unit, and (v) Gram Panchayat/Village and Water Sanitation Committee.  At the Gram Panchayat level, Swachhta Doots may be hired to assist with activities such as identification of beneficiaries, IEC, and maintenance of records. Planning: As was done under NBA, each state must prepare an Annual State Implementation Plan.  Gram Panchayats must prepare implementation plans, which will be consolidated into Block Implementation Plans.  These Block Implementation Plans will further be consolidated into District Implementation Plans.  Finally, District Implementation Plans will be consolidated in a State Implementation Plan by the State Swachh Bharat Mission (Gramin). A Plan Approval Committee in Ministry of Drinking Water and Sanitation will review the State Implementation Plans.  The final State Implementation Plan will be prepared by states based on the allocation of funds, and then approved by National Scheme Sanctioning Committee of the Ministry. Funding: Funding for SBM-G will be through budgetary allocations of the central and state governments, the Swachh Bharat Kosh, and multilateral agencies.  The Swachh Bharat Kosh has been established to collect funds from non-governmental sources.  Table 3, below, details the fund sharing pattern for SBM-G between the central and state government, as provided for in the SBM-G guidelines. Table 3: Funding for SBM-G across components

Component Centre State Beneficiary Amount as a % of SBM-G outlay
IEC, start-up activities, etc 75% 25% - 8%
Revolving fund 80% 20% - Up to 5%
Construction of household toilets 75%(Rs 9000)90% for J&K, NE states, special category states 25%(Rs 3000)10% for J&K, NE states, special category states -- Amount required for full coverage
Community sanitary complexes 60% 30% 10% Amount required for full coverage
Solid/Liquid Waste Management 75% 25% - Amount required within limits permitted
Administrative charges 75% 25% - Up to 2% of the project cost

One of the changes from NBA, in terms of funding, is that funds for IEC will be up to 8% of the total outlay under SBM-G, as opposed to up to 15% (calculated at the district level) under NBA.  Secondly, the amount provided for the construction of household toilets has increased from Rs 10,000 to Rs 12,000.  Thirdly, while earlier funding for household toilets was partly through NBA and partly though the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the provision for MGNREGS funding has been done away with under SBM-G.  This implies that the central government’s share will be met entirely through SBM-G. Implementation: The key components of the implementation of SBM-G will include: (i) start up activities including preparation of state plans, (ii) IEC activities, (iii) capacity building of functionaries, (iv) construction of household toilets, (v) construction of community sanitary complexes, (vi) a revolving fund at the district level to assist Self Help Groups and others in providing cheap finance to their members (vii) funds for rural sanitary marts, where materials for the construction of toilets, etc., may be purchased, and (viii) funds for solid and liquid waste management. Under SBM-G, construction of toilets in government schools and aganwadis will be done by the Ministry of Human Resource Development and Ministry of Women and Child Development, respectively.  Previously, the Ministry of Drinking Water and Sanitation was responsible for this. Monitoring: Swachh Bharat Missions (Gramin) at the national, state, and district levels will each have monitoring units.  Annual monitoring will be done at the national level by third party independent agencies.  In addition, concurrent monitoring will be done, ideally at the community level, through the use of Information and Communications Technology. More information on SBM-G is available in the SBM-G guidelines, here.