Pre-budget discussions begin, power and telecom laggards in spending
While other ministries on an average spent 54% of the money allocated to them in this year’s budget during the April-September period, power and telecom departments spending stood at 40%.business Updated: Nov 07, 2017 20:47 IST
As the finance ministry begins preparations for the new budget, its mid-year review has found that key infrastructure ministries such as power and telecom lag in spending the money set aside for them this financial year.
While other ministries on an average spent 54% of the money allocated to them in this year’s budget during the April-September period, power and telecom departments spending stood at 40%, sources in finance ministry told HT on Tuesday.
“Compared to 52% last year, an average spending of 54% is satisfactory. But the laggards have been asked to explain why they have spent less,” an officer in the expenditure department of the finance ministry said. He refused to be quoted as he is not authorised to speak to the media.
Lower spending could have an impact on the allocation of funds to these ministries in the next budget and the two are also unlikely to get additional funds in the upcoming “demand for grants”.
The mid-year review is part of the budgetary exercise when ministries give an account of their expenditure. Ministries are given additional funds depending on their spending patterns and needs during the winter session of Parliament, the process is called “demand for grants”.
“There are several issues facing the power sector leading to lower spending. There is the issue of stranded power projects, lower demand from states, all this is impacting expenditure,” said RV Shahi, former power secretary said.
The power ministry was allocated Rs 13, 881 crore and the ministry of communications, including IT, telecom and post, got Rs 36,237 crore for 2017-18.
“Naturally, if power and telecom have spent less this year, why should they be given more allocation,” said another source in the expenditure department.
The government’s total spending between April and September stood at Rs 11.5 lakh crore, 53.4% of the financial year’s target of Rs 21.46 lakh crore.
“The overall spending by the central government should have been much higher. There seems to be a squeeze in funds, and this is clear from the fact that several states are complaining that funds from the centre is due on major schemes such as mid-day meals and NREGS,” said a former finance secretary, who did not wish to be named.
The mid-day meal is the world’s biggest school lunch programme aimed at encouraging enrolment and nutrition while the Mahatma Gandhi National Rural Employment Guarantee Act scheme guarantees 100 days of work a year to every rural household.