Pattern of Public Expenditure and Expenditure Implications of Fiscal Reform Measures
4.3 Pattern of Total Expenditure in Assam
4.3.1 Pattern of Revenue Expenditure
Generally speaking, revenue expenditure is an amount that is expensed immediately—
thereby being matched with revenues of the current accounting period. Revenue expenditure is incurred to maintain the current level of services and does not represent any addition to the state’s service network. The importance of the revenue expenditure lies in the fact that it helps to maintain and continue the existing level of services. For this, there should be proper allocation of expenditure on general services, social and community services, economic services and grants-in-aid (GIA) and contribution etc. The composition of revenue expenditure of the state of Assam for the period under consideration has been provided in table 4.4.
Table 4.4
Composition of Revenue Expenditure of Government of Assam (` ` ` in lakhs) `
Year General Services Social and Community Services
Economic Services
GIA and
Contributions Total
1 2 3 4 5 6
1990-91 59583 (31.03) 78185 (40.71) 53480 (27.85) 792 (0.41) 192040 1991-92 53498 (24.90) 95111 (44.28) 65350( 30.42) 850 (0.40) 214810 1992-93 86564 (35.32) 98525 (40.20) 59364 (24.22) 639 (0.26) 245093 1993-94 103705 (35.75) 121563 (41.90) 63901 (22.03) 948 (0.33) 290117 1994-95 121321(37.09) 131203 (40.11) 73963 (22.61) 584 (0.18) 327071 1995-96 122135 (34.16) 145674 (40.74) 88811 (24.84) 956 (0.27) 357576 1996-97 131639 (36.86) 155334 (43.49) 69751 (19.53) 407 (0.11) 357131
1997-98 155820 (35.58) 174527 (43.22) 73508 (18.20) - 403855
1998-99 159355 (36.58) 196208 (44.43) 85060 (19.26) 1010 (0.23) 441634 1999-00 246190 (42.11) 237755 (40.67) 99959 (17.10) 663 (0.11) 584567 2000-01 254785 (39.70) 281460 (43.86) 104583(16.30) 883 (0.14) 641711 2001-02 292552 (42.73) 270162 (39.46) 121522(17.75) 388 (0.06) 684624 2002-03 311219 (43.76) 289801 (40.75) 109475(15.39) 754 (0.11) 711250 2003-04 352912 (41.77) 336149 (39.78) 154683 (18.31) 1235 (0.15) 844979 2004-05 368891 (36.06) 426242 (41.67) 226470 (22.14) 1311 (0.13) 1022914 2005-06 420161 (39.88) 398710 (37.84) 233671 (22.18) 1089 (0.10) 1053631 2006-07 430236 (37.55) 447748 (39.08) 266889 (23.30) 780 (0.07) 1145653 2007-08 492442 (38.64) 495675 (38.89) 285405 (22.39 894 (0.07) 1274416 2008-09 536133 (37.64) 558225 (38.19) 269330 (18.91) 60613 (4.26) 1424331 2009-10 835688 (39.35) 789128 (37.16) 341418 (16.08) 156988 (7.39) 2123200
CAGR(1990-91 to 1999-00) 17.07 13.15 7.20 -1.96 13.17
CAGR (2000-01 to2009-10) 14.11 12.14 14.05 77.82 14.22
CAGR (1990-91 to 2009-10) 14.91 12.94 10.25 32.10 13.48
Figures in parentheses represent percentage of these variables to total
Source: Directorate of Economics and Statistics, Government of Assam, various issues It is evident from table 4.4 that major portion of the revenue expenditure of the state has been incurred on general and social and community services during the time period 1990-91 to 2009-10. During the period of study, revenue expenditure on general services is found to be comparatively higher than the expenditure on social and community services and economic services. The compound annual growth rate of general services was found to be 14.91 percent during the time period 1990-91 to 2009-10. For the same time period, expenditure on
social and community services and economic services registered a compound growth rate of 12.94 percent and 10.25 percent respectively implying that growth rate of these components of expenditure is not compatible with growth rate of general services. Grants-in-aid provided by the state government constituted less than 1 percent of the total revenue expenditure during 1990s and registered a compound growth rate of (-) 1.96 percent during that period.
Significant increase in revenue expenditure on grants-in-aid was noticed during the first decade of the present century which registered a compound growth rate of 77.82 percent. But increased allocation for grants-in-aid was found to be mainly contributed by the high growth rate of this component of expenditure in the year 2009-10 amounting to 346.21 percent.
4.3.1.1 Pattern of Revenue Expenditure, General Services:
As expenditure on general services has constituted a major portion of the revenue expenditure, it is necessary to analyse the composition of revenue expenditure on general services. The composition of revenue expenditure on general services during the study period has been provided in table 4.5.
Table 4.5
Revenue Expenditure of Government of Assam on General Services (``` in lakhs) `
Year Organ of
State*
Fiscal Services#
Interest payments and Servicing of Debt
Administrative
Services Pensions Total
1 2 3 4 5 6 7
1990-91 1579 (2.65) 3187 (5.35) 26246 (44.05) 23645 (39.65) 4946 (8.30) 59583 1991-92 2934 (5.48) 3669 (6.86) 9270 (17.33) 29259 (54.69) 8366 (15.64) 53498 1992-93 2147 (2.48) 3637 (4.20) 41073 (47.45) 29137 (33.66) 10570 (12.21) 86564 1993-94 2321 (2.24) 4289 (4.14) 49004 (47.25) 34576 (33.34) 13515 (13.03) 103705 1994-95 3024 (2.49) 489 (4.04) 58933 (48.58) 3816 (31.46) 16302 (13.44) 121321 1995-96 4629 (3.79) 5360 (4.39) 4876 (39.92) 45322 (37.11) 18062 (14.79) 122135 1996-97 2941 (2.23) 5789 (4.40) 55990 (42.53) 45494 (34.56) 21425 (16.28) 131639 1997-98 6703 (4.30) 6029 (3.87) 63893 (41.00) 54348 (34.88) 24847 (15.95) 155820 1998-99 4823 (3.03) 6765 (4.25) 52069 (32.68) 65300 (40.98) 30398 (19.08) 159335 1999-00 8746 (3.55) 9698 (3.94) 97088 (39.44) 78779 (32) 51879 (21.07) 246190 2000-01 6792 (2.67) 9807 (3.85) 88511 (34.74) 82292 (32.30) 67383 (26.45) 254785 2001-02 6832 (2.34) 9338 (3.19) 112199 (38.35) 91045 (31.12) 73138 (25) 292552 2002-03 582(1.87) 10188 (3.27) 131674 (42.31) 85847 (27.58) 77 686(24.96) 311219 2003-04 9701 (2.75) 10186 (2.89) 15421 (43.70) 87884 (24.90) 90931 (25.77) 352912 2004-05 9800 (2.66) 16160 (4.38) 14475 (39.24) 9186 (24.90) 106314 (28.82) 368891 2005-06 11373 (2.71) 12035 (2.86) 165412 (39.37) 13104 (31.19) 101199 (24.09) 420161 2006-07 8580 (1.99) 13538 (3.15) 169167 (39.32) 121112 (28.15) 117839 (927.39) 430236 2007-08 10054 (2.04) 13497 (2.74) 171624 (34.78) 163150 (33.13) 134068 (27.23) 492442 2008-09 17743 (3.30) 16192 (3.02) 170133 (31.73) 188235 (35.10) 143737 (21.71) 536133 2009-10 15345 (1.84) 18731 (2.24) 194058 (23.22) 289314 (34.62) 176928 (21.17) 835686
CAGR
(1990-91 to 1999-00) 20.95 13.16 15.64 14.31 29.84 17.07
CAGR
(2000-01 to2009-10) 9.48 7.45 9.11 14.99 11.32 14.11
CAGR
(1990-91 to 2009-10) 12.71 9.77 11.10 14.09 20.72 14.91
Figures in parentheses represent percentage of these variables to total
Source: Directorate of Economics and Statistics, Government of Assam, various issues
* 1. State Legislature 2. Governor 3. Council of Minister 4. Administration of Justice, Plain areas 5. Administration of Justice, Hill Areas 6.Elections
# Collection of taxes and duties and other fiscal services
It is evident from table 4.5 that interest payments and servicing of debt, administrative services and pension constitute major portion of the expenditure on general services during the period of study. These three components together constitute more than 90 percent of the
revenue expenditure on general services during the study period. The compound growth rate of expenditure on interest payments, administrative services and pension during the time period 1990-91 to 2009-10 is found to be 11.10, 14.09 and 20.72 percent respectively. The growth rate of revenue expenditure on administrative services in the first decade of the present century was found to be slightly higher than in 1990s. On the other hand, compound growth rate of revenue expenditure on interest payments and servicing of debt and pensions was declined during the first decade of the present century compared to the time period 1990- 91 to 1999-00. The initiative by the recent Finance Commissions of India to reduce the interest burden of the state governments may contribute towards reduction of growth rate of interest payments of the state during the time period 2000-01 to 2009-10.
4.3.1.2 Pattern of Revenue Expenditure, Social and Community Services:
Apart from the expenditure on general services, it is necessary to analyse the composition of revenue expenditure on social and community services and economic services which has a positive impact on the economic development of the state. The composition of expenditure on social and community services has been provided in table 4.6.
It is evident from table 4.6 that the expenditure on education, sports, art and culture has constituted the major portion of the revenue expenditure on social and community services during the time period 1990-91 to 2009-10. On an average, it constitutes almost 64 percent of the total revenue expenditure on social services during the period of study. But decline in the share of expenditure on education, sports, art and culture has been noticed during the period of study. In the year 2009-10, the expenditure on education, sport, art and culture constituted 51.85 percent of the total expenditure on social and community services compared to 57.42 percent in the year 1990-91. The expenditure on medical, family plan, public health and sanitation constitutes, on an average, 21.36 percent of the total revenue expenditure on social and community services during the study period. The compound growth rate of medical, family plan, public health and sanitation is found to be slightly lower than the compound growth rate of expenditure on education, sports, art and culture during the period taken for the analysis.
Table 4.6
Revenue Expenditure of Government of Assam on Social and Community Services (``` in ` lakhs)
Year Education, Sports, Art and Culture
Medical, Family Plan, Public Health and
Sanitation
Others* Total
1 2 3 4 5
1990-91 44894 (57.42) 22448 (28.71) 10753 (13.75) 78185
1991-92 55990 (58.87) 25980 (27.32) 13141 (13.82) 95111
1992-93 64623 (65.59) 22559 (22.90) 11343 (11.51) 98525
1993-94 79191 (65.14) 25768 (21.20) 16604 (13.66) 121563
1994-95 87003 (66.31) 28860 (22.00) 15340 (11.69) 131203
1995-96 97438 (66.89) 32712 (22.46) 15524 (10.66) 145674
1996-97 103462 (66.61) 33999 (21.89) 17873 (11.51) 155334
1997-98 116250 (66.61) 3817 (21.87) 20106 (11.52) 174527
1998-99 136198 (69.42) 36906 (18.81) 23103 (11.77) 196208
1999-00 166437 (70) 47714 (20.07) 23604 (9.93) 237755
2000-01 194116 (68.97) 56751 (20.16) 30593 (10.87) 281460
2001-02 187137 (69.27) 52548 (19.45) 30477 (11.28) 270162
2002-03 199706 (68.91) 51964 (17.93) 38131 (13.16) 289801
2003-04 236248 (70.28) 56438 (16.79) 43463 (12.93) 336149
2004-05 250251 (58.71) 82398 (19.33) 93593 (21.96) 426242
2005-06 251560 (63.09) 82123 (20.60) 65027 (16.31) 398710
2006-07 275112 (61.44) 89728 (20.04) 82908 (18.52) 447748
2007-08 304705 (61.47) 96441 (19.46) 94529 (19.07) 495675
2008-09 329138 (58.96) 123624 (22.14) 105495 (18.90) 558257
2009-10 409194 (51.85) 190086 (24.09) 189848 (24.06) 789128
CAGR
(1990-91 to 1999-00) 15.67 8.74 9.13 13.15
CAGR
(2000-01 to 2009-10) 8.64 14.37 22.49 12.14
CAGR
(1990-91 to 2009-10) 12.33 11.90 16.31 12.94
Figures in parentheses represent percentage of these variables to total
Source: Directorate of Economics and Statistics, Government of Assam, various issues
*includes expenditure on urban development, welfare of SC, ST and OBCs, labour welfare, social security and welfare, nutrition
4.3.1.3 Pattern of Revenue Expenditure, Economic Services:
As the state suffers from lots of bottlenecks particularly in infrastructure sector, it is necessary that the state should spend sufficiently on economic services to remove those bottlenecks. The amount of revenue expenditure on different economic services of the state has been provided in table 4.7.
It is evident from figure 4.7 that agriculture and allied activities has constituted the major portion of the revenue expenditure on economic activities during the period of study.
Although the share of this sector has declined due to low growth rate compared to the other components, but still it constitutes 29.75 percent of the revenue expenditure on economic services in 2009-10. Increase in the share of rural development has been observed during the period of study. The share of expenditure on rural development has increased from 15.15 percent in the year 1990-91 to 22.64 percent in the year 2009-10. The compound growth rate of this component of expenditure during the time period 2000-01 to 2009-10 is found to be 25.20 percent compared to 5.29 percent in 1990s. The compound growth rate of energy is found to be the highest among the all categories of expenditure as it registered a compound growth rate of 25.83 percent during the period of study. Transport and communication is found to be another significant component which shares, on an average, 17.30 percent of the revenue expenditure on economic services during the study period.
Table 4.7
Composition of Revenue Expenditure on Economic Services (``` in crore) ` Year Agriculture and
Allied Activities
Rural Development
Special Area Programme
Irrigation and
Flood Control Energy Industry and Mineral
Transport &
Communication
General Economic Services
Science, Technology and Environment
1 2 3 4 5 6 7 8 9 10
1990-91 24337 (45.51) 8101 (15.15) 570 (1.07) 4409 (8.24) 15 (0.03) 4999 (9.35) 8870 (16.59) 2050 (3.83) 129 (0.24) 1991-92 27831 (42.59) 8864 (13.56) 666 (1.02) 5570 (8.52) 35 (0.05) 8187 (12.53) 11826 (18.10) 2196 (3.36) 175 (0.27) 1992-93 23966 (40.37) 8849 (14.91) 535 (0.90) 5286 (8.90) 22 (0.04) 5974 (10.06) 12485 (21.03) 2098 (3.53) 149 (0.25) 1993-94 25362 (39.69) 10963 (17.16) 712 (1.11) 4455 (6.97) 44 (0.07) 6717 (10.51) 11596 (18.15) 3816 (5.97) 236 (0.37) 1994-95 28600 (38.67) 11492 (15.54) 1196 (1.62) 5060 (6.84) 45 (0.06) 9091 (12.29) 13496 (18.25) 4742 (6.41) 241 (0.33) 1995-96 45782 (51.55) 9855 (11.10) 1417 (1.60) 5069 (5.71) 48 (0.05) 8341 (9.39) 12927 (14.56) 5070 (5.71) 302(0.34) 1996-97 29408 (42.16) 10491 (15.04) 536(0.77) 6025(8.64) 12 (0.02) 5891 (8.45) 13029 (18.68) 4234 (6.07) 125 (0.18) 1997-98 30775 (41.87) 9181 (12.49) 1163 (1.58) 6792 (9.24) 52 (0.07) 6962 (9.47) 13398 (18.23) 5132 (6.98) 53 (0.07) 1998-99 32937 (38.72) 10173 (11.96) 1831 (2.15) 9099 (10.70) 5 (0.01) 9011 (10.59) 16518 (19.42) 5407 (6.36) 80 (0.09) 1999-00 40751 (40.77) 12878 (12.88) 919 (0.92) 10716 (10.72) 14(0.01) 9088 (9.09) 19237 (19.24) 6258 (6.26) 98 (0.10) 2000-01 40622 (38.84) 10178 (9.73) 1302 (1.24) 14718 (14.07) 12 (0.01) 9424 (9.01) 20818 (19.91) 7398 (7.07) 111 (0.11) 2001-02 42542 (35.01) 27424 (22.57) 1872 (1.54) 12628 (10.39) 1816 (1.49) 8040 (6.62) 20451 (16.83) 6593 (5.43) 156 (0.13) 2002-03 36221 (33.09) 21896 (20) 941 (0.86) 12878 (11.76) 508 (0.46) 8716 (7.96) 22238 (20.31) 5980 (5.46) 97 (0.09) 2003-04 47814 (30.91) 26462 (17.11) 2124 (1.37) 17718 (11.45) 14202 (9.18) 9647 (6.24) 24691 (15.96) 11886 (7.68) 139 (0.09) 2004-05 48791 (21.54) 43616 (19.26) 1998 (0.88) 20784 (9.18) 31225(13.79) 12956 (5.72) 30900 (13.64) 35876 (15.84) 324 (0.14) 2005-06 54779 (23.44) 37683 (16.13) 2177 (0.93) 21866 (9.36) 32259(13.81) 13390 (5.73) 34662 (14.83) 36683 (15.70) 172 (0.07) 2006-07 61358 (22.99) 56136 (21.03) 2701 (1.01) 26922 (10.09) 29094 (10.90 11274 (4.22) 38665 (14.49) 40537 (15.19) 201 2007-08 67232 (23.56) 78576 (27.53) 5322 (1.86) 29205 (10.23) 3082 (1.08) 17792 (6.23) 50372 (17.65) 33255 (11.65) 568 2008-09 80349 (29.83) 6515 (24.19) 10596(3.93) 29483(10.95) 8 (.0030) 16908 (6.28) 40339 (14.98) 24601 (9.13) 1894 (0.70) 2009-10 10107 (29.75) 7693 (22.64) 2111 (6.22) 3206 (9.44) 1181 (0.35) 21771(6.41) 51557(15.17) 183(0.05) 33883(9.97)
CAGR (1990-91 to 1999-00) 5.89 5.29 5.45 10.37 -0.76 6.87 8.98 13.20 -3.01
CAGR (2000-01 to2009-10) 10.66 25.20 36.29 9.04 66.51 9.75 10.60 -33.70 88.83
CAGR (1990-91 to 2009-10) 7.78 12.58 20.94 11.01 25.83 8.05 9.71 -11.94 34.07
Source: Figures in parentheses represent percentage of these variables to total
Directorate of Economics and Statistics, Government of Assam, various issues
Handbook of Statistics of State Government Finances, Reserve Bank of India, various issues