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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 |
Budgeted |
Revised |
Provisional |
Difference |
|
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 |
Budgeted |
Revised |
Provisional |
Difference |
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.
This article was published in the Indian Express on April 8, 2011
Dodging the Drafts
By Kaushiki Sanyal and C.V. Madhukar
Social activist, Anna Hazare’s fast unto death for the enactment of a strong Lok Pal Bill has provided an impetus to examine not only the Bill proposed by civil society activists but suggestions made by various experts.
The idea of establishing an authority where the citizen can seek redress against administrative acts of the government was first mooted in 1963 during a debate on Demands for Grants for the Law Ministry. Under the existing system, a citizen can either move court or seek other remedies such as petitioning his Member of Parliament. However, these remedies are limited because they maybe too cumbersome or specific grievances may not be addressed. Also, the laws that penalise corrupt officials do not have provision to redress specific grievances of citizens. Currently, corrupt public officials can be penalised under the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. Both these laws require the investigating agency to get prior sanction of the central or state government before it can initiate the prosecution process in a court.
The office of the Lok Pal or an Ombudsman seeks to provide a forum for citizens to complain against public officials. The Lok Pal would inquire into such complaints and provide some redressal to citizens. The basic idea of the institution of Lok Pal was borrowed from the concept of Ombudsman in countries such as Finland, Norway, Denmark, Sweden, U.K. and New Zealand. Presently, about 140 countries have the office of the Ombudsman. In Sweden, Denmark and Finland, the office of the Ombudsman can redress citizens’ grievances by either directly receiving complaints from the public or suo moto. However, in the UK, the office of the Parliamentary Commissioner can receive complaints only through Members of Parliament (to whom the citizen can complain). Sweden and Finland also have the power to prosecute erring public servants.
The first Lok Pal Bill in India was introduced in 1968, which lapsed with the dissolution of the Lok Sabha. The Bill was introduced seven more times in Parliament, the last time in 2001. Each time it lapsed except in 1985 when it was withdrawn.
Several commissions have examined the need for a Lok Pal and suggested ways to make it effective, without violating Constitutional principles. They include: the First Administrative Reforms Commission (ARC) of 1966, the National Commission to Review the Working of the Constitution of 2002 and the Second Administrative Reforms Commission of 2007. The Lok Pal Bills that were introduced were referred to various Parliamentary committees (the last three Bills were referred to the Standing Committee on Home Affairs).
The First ARC report recommended that two independent authorities be created to redress grievances: first, a Lok Pal, to deal with complaints against the administrative acts of Ministers or secretaries of government at the centre and the state; and second, a Lokayukta in each state and at the centre, to deal with complaints against the administrative acts of other officials. Both these authorities should be independent of the executive, judiciary and legislature and shall be appointed by the President on advice of the Prime Minister, Leader of the Opposition and the Chief Justice of India.
The National Commission to Review the Working of the Constitution urged that the Constitution should provide for the appointment of the Lok Pal and Lokayuktas in the states but suggested that the Prime Minister should be kept out of the purview of the authority.
The Second Administrative Commission, formed in 2005, also recommended that the office of the Lok Pal be established without delay. It was in favour of including Ministers, Chief Ministers and Members of Parliament. However, it wanted to keep the Prime Minister outside the Lok Pal’s ambit. The ARC also recommended that a reasonable time-limit for investigation of different types of cases should be fixed.
The 1996, 1998 and 2001 Bill covered Prime Minister and MPs. The Standing Committee examining the 1998 Bill recommended that the government examine two basic issues before going forward with the Bill: first, MPs are deemed to be public servants under the Prevention of Corruption Act, 1988. If they are also brought under the purview of Lok Pal it may be “tantamount to double jeopardy”; and second, subjecting MPs to an outside disciplinary authority may affect supremacy of Parliament.
The 2001 Bill was also referred to the Standing Committee, which accepted that the Prime Minister and MPs should be included in the Bill. It further recommended that a separate legislation be enacted to ensure accountability of the judiciary. It however stated that the Bill did not address public grievances but focussed on corruption in high places.
The states have been more successful in establishing the Lokayuktas. So far 18 states have enacted legislation to set up the office of Lokayukta. While Karnataka Lokayukta is often hailed as a successful case, several other states have had limited success in combating corruption since all of them are recommendatory bodies with limited powers to enforce their findings.
A Group of Ministers is looking into ways to tackle corruption, including the establishment of a Lok Pal. A public debate on the issues raised by various committees would help iron out the weaknesses of any proposed legislation.
This article was published in the Indian Express on April 8, 2011