How AAP govt spent more in four years, but still fell short in spending
As the AAP govt prepares to present its final full budget, an analysis of its four previous budgets shows a regime that has been successful in expanding the size of its funding pie and allocations to its stated areas of focus, but not quite in seeing through those allocations the way it would have liked to.
As the Aam Aadmi Party government prepares to present its final full budget, an analysis of its four previous budgets shows a regime that has been successful in expanding the size of its funding pie and allocations to its stated areas of focus, but not quite in seeing through those allocations the way it would have liked to.
For the three years for which spending data is available (the exception is 2018-19, for which it will reveal data on Tuesday), the AAP government managed an average annual increase of 13% in spending, against the annual average of 6% in the two years before it came to power.
This figure could have been higher, as spending did not keep pace with allocation: it averaged an annual underutilisation of 16%, against a figure of 12% in the two years before it came to power (chart 1).
The AAP government defined its priorities—education and health—and channelled money there. The share of the two departments that control these sectors increased from 33% of the total state expenditure in 2012-13 (the last full budget of the previous Congress government) to 37% in 2015-16 (the first year of the AAP government) and was budgeted to increase to 43% in 2018-19 (the fourth year of the AAP government).
During this period, the share of education in total expenditure increased from 22% to 29%. Further, the share of the department of health and family welfare, which is responsible for the Mohalla Clinics scheme, increased from 11% to 14%. Both these figures are significantly higher than what most states are allocating. According to an analysis of the 2018-19 Delhi budget done by PRS Legislative Services, the average allocation by 19 other states was 16.1% in education and 4.8% in health.
In Delhi, additional allocations came from higher tax collections and by saving on interest payments and debt repayments. Some funds came by way of allocating a smaller share to other sectors. In Delhi, the sector that saw a decline in relative importance was transport, whose share in the total state expenditure declined from 17% in 2013-14 to 10% in 2018-19 (chart 2).
The budgetary performance of the AAP government has also been marked by under-utilisation. On average for three years, if the state was allocating ₹100, it was spending only ₹84 from it. Further, this issue of under-utilisation was rampant across departments, which is a pointer to issues in planning or execution.
In 2016-17, of the top 10 departments by allocation, the only one to achieve full utilisation of funds allocated to it was grants-in-aid and contributions, which is tasked with releasing monies to other lower rungs of the government.
Major departments were all laggards in spending, including transport (33%), health and family welfare (23%) and education (15%) (chart 3). When it reports its performance for 2018-19 on Tuesday, will the AAP government do better on this front?
(howindialives.com is a database and search engine for public data)