In fiscal 2020-21, total expenditure is budgeted at Rs 30.42 trillion, posting an increase of 12.7% over fiscal 2019-20.In fiscal2020-21, the total expenditure of the Government is estimated to be at 13.52% of GDP while it was 15.8% of GDP in fiscal 2009-10. The growth of total expenditure is expected to be 7% and 9.8% respectively over previous year in fiscal 2021-22 and 2022-23.Capital expenditure is expected to rise to Rs 4.12 trillion or 1.8% of GDP in 2020-21 compared to 1.7% in fiscal 2019-20.
Increase in expenditure is mainly due to higher interest payments on Market Loans and interest on securities issued to Public Sector Banks,higher provisions made under Road Transport, Railways and for infrastructure projects in pipeline. Capital infusion in BSNL,MTNL for 4G spectrum, implementation of VRS and payment for employees of BSNL,MTNL,higher requirement under PM-Kisan scheme.
Budgeted revenue expenditure in 2020-21 is Rs 26.30 trillion which reflects an increase of Rs 2.80 trillion or 11.9% against 2019-20. The revenue expenditure is estimated at 86.45% of the total expenditure. The major components of the revenue expenditure of the Government include Interest payments and debt servicing (23.28% of total expenditure), Subsidies (7.49% of total expenditure), Salaries and Pensions (6.93% of total expenditure), Defence expenditure (10.62% of total expenditure), grants and Loans to State Governments and others (16.92% of total expenditure).
In 2020-21, expenditure on Interest Payments and Debt Servicing is budgeted to rise by 13.29% to Rs 7.08 trillion. Expenditure on subsidies is budgeted to be flat at Rs 2.27 trillion, which is 1.09% of GDP. Expenditure on Defense and Services is to rise by 2.14% to Rs 3.23 trillion and on pensions to increase by 14.38% (0.94% of estimated GDP for the year). The interest payments as a percentage of revenue receipts are expected to come down in the medium term as the total interest payments outgo in fiscal 2021-22 and 2022-23 as a percentage of revenue receipts is expected to be 35.6%.
In fiscal 2020-21, expenditure on account of subsidies is expected to be Rs 2.27 trillion, flat against 2019-20 on use of NSSF for funding the food subsidy requirements of the FCI.
The provision for capital expenditure in fiscal 2020-21 is Rs 4.12 trillion, which is 13.22% of the total expenditure estimated for the year and higher by 18.1% against 2019-20. Capital expenditure as a percentage of GDP is expected to be at 1.8% of GDP. Capex is expected to reach 1.9% of GDP by fiscal 2022-23 on account of push towards infrastructure projects.
Total Capital Expenditure on railways is budgeted to rise 3% to Rs 1.6 trillion in 2020-21.