सोमवार, ७ मे, २०१८

Gujarat and Maharashtra - Two Lazy States

The N K Singh's 15th Finance Commission has started the debate over the population criteria. But we are ignoring one thing. Are states using this fund properly? Let's take two states - Gujarat and Maharashtra Before 2017, there was two types of expenditure - planned and non-planned. Planned expenditure of states is the expenditure that comes under center's advances to states for their plan. The expenditure other than planned expenditure i.e. spending to maintain the law and order i.e. spending on police, government offices and departments etc is known as non-planned expenditure. Now let's have a look of planned expenditure of Maharashtra state.

Data Source - An author uses data from Reserve Bank of India for given analysis

Budget estimates are predicted expenditure based on the analysis of pre-budget trends.
Revised estimates are a mid-year estimates based on six months actual trends and predicted expenditure for the balance six months.
Accounts are actually spending.
Maharashtra's actually spending is much lower than the revised and budget estimates for plan expenditure.

Now for Gujarat,
Data Source - An author uses data from Reserve Bank of India for given analysis
Again actually spending for plans is lower than the revised and budget estimates for plan expenditure. 

And non-planned expenditure of Maharashtra,
Data Source - An author uses data from Reserve Bank of India for given analysis

For non-planned expenditure, we can see the opposite trend. Actually spending is in fact more than the budget estimates of non-planned expenditure. 

Data Source - An author uses data from Reserve Bank of India for given analysis

Even for Gujarat, there is no much difference between budget estimates and actually spending. 

Data Source - An author uses data from Reserve Bank of India for given analysis

Maharashtra's total expenditure is more or less equal to the budget estimates. 

Data Source - An author uses data from Reserve Bank of India for given analysis

For Gujarat, total actual spending is less than the budget estimates. 

Now important thing is that as far as planned expenditure is concerned, both states are lazy to spend according to the budget estimates and revised budget estimates. What does it mean? It means the grants which are provided by the center to states are not fully utilized on the projects and plans. That means funds allocated for plans for rural development, infrastructure, construction of roads, electricity generation etc are not fully used. SO center government should be careful before allocating the funds to such lazy states. That remaining funds can be used by other states MORE EFFICIENTLY. 






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