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Trends in Government Expenditure during 2012-13

Trends in Government Expenditure during 2012-13

  • Budget 2013-14 estimated total expenditure to be 18.1% higher than the actual total expenditure in 2012-13. The higher total expenditure was expected to be compensated by much higher non-debt receipts.                                                                                Trends in Government Expenditure during 2012-13

Government Debt

  • The total liabilities for the Government of India include debt and liabilities accounted for in the Consolidated Fund of India (technically defined as public debt) as well as liabilities accounted for in the public account.
  • At the end of March 2013, public debt was placed at 39% of GDP and other liabilities at 11.2 % of GDP. It is further classified into internal and external debt. Internal debt, constituting 95.5% and the remaining is external debt.
  • State governments are not allowed to directly borrow externally hence their entire debt is domestic. Over time, there is a compositional shift toward marketable debt, while the public account liabilities have seen a commensurate decline.
  • The share of marketable debt to total internal liabilities, which was about 30 per cent in the beginning of the 1990s, increased to 40 per cent in the beginning of the 2000s and is budgeted to increase to 67.5 per cent by end-March 2013.                            Trends in Government Expenditure during 2012-13

Fiscal Marksmanship

  • This term refers to the precision or accuracy of forecast, targets and estimates in a document related to fiscal policy like the Union Budget. Fiscal policy is evaluated not only on overall fiscal marksmanship in terms of fiscal and revenue deficits, which are, in effect, derived indicators, but also on marksmanship in terms of key revenue and expenditure targets.
  • In the immediate post- FRBM period, fiscal marksmanship of the central government had a series of over performances to its credit except in 2008-9 and in 2011-12. However, there was large slippage in 2011-12 due to a confluence of adverse economic outcomes arising from global arid domestic factors.
  • It was on account of lower receipts (which explains about 58 per cent of total slippage) due to a sharp deceleration in real GDP growth particularly in the industry sector, elevated levels of inflation, subdued financial market conditions for generating the required disinvestment receipts, and overshooting of expenditure (accounting for the remaining 42 per cent of slippage) mainly on account of persistently high levels of global crude oil and fertilizer prices which were not passed through to the domestic price setting.


Indian Economy

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