The Union Budget 2018-19 presented by the FM Arun Jaitley to the Parliament on the 1st of February saw a 10.1% rise in total expenditure at Rs 24.42 trillion against Rs 22.44 trillion in fiscal 2017-18. In fiscal 2018-19, the total expenditure of the Government is estimated to be at 13% of GDP while it was 15.8% of GDP in fiscal 2009-10.By 2020-21, it is expected to come down to 12.7% of GDP.
The government has increased expenditure on transportation,IT and Telecom by 25% ,Agriculture and Allied Activities by 12% and healthcare by 2.76%.
The total revenue expenditure estimated in 2018-19 is Rs 21.41 trillion, a rise of 10.2% over the revised estimates of 2017-18.The revenue expenditure is estimated at 87.69% of the total expenditure.The major components of the revenue expenditure of the Government include Interest payments and debt servicing (23.6% of total expenditure), Subsidies (11% of total expenditure), Salaries and Pensions (6.9% of total expenditure), Defence revenue expenditures, grants and transfer to State Governments for compensating revenue losses on account of implementation of GST and others (19.71% of total expenditure).
In 2018-19, expenditure on Interest Payments and Debt Servicing is budgeted to rise by 8.48% to Rs 5.7 trillion. Expenditure on subsidies is budgeted to increase by 15% to Rs 2.46 trillion, which is 1.4% of GDP. Expenditure on Defense and Services is to rise by 5.84% to Rs 2.82 trillio and on pensions to increase by 14.32% (0.9% of estimated GDP for the year).
Food subsidy has risen on account of higher provision made for food subsidy under National Food Security Act,expenditure on pension has increased as higher requirement under Defence Pensions,Civil Pensions and pensions payable to erstwhile employees of Department of Telecommunications absorbed in Bharat Sanchar Nigam Limited.
The provision for capital expenditure in 2018-19 is Rs 3 trillion, which is 12.3% of the total expenditure estimated for the year.Capital expenditure as a percentage of total expenditure is projected to increase by 12.6% in 2019-20 and by 12.9% in 2020-21. As a per cent of GDP capital expenditure is expected to be 1.6% in 2018-19.
Government decided to fund the expenditure of the health, education, road transport and highways and Railways ministries through the National Investment Fund for Rs 824 billion in 2018-19.
Total Capital Expenditure on railways is budgeted to rise 26% to Rs 645 billion in 2018-19.
In 2017 -18, government has budgeted Rs 903 billion for Bank Recapitalization while in 2018-19 it is budgeted at Rs 650 billion.Government will capitalise PSU banks in a front-loaded manner with a view to support credit growth and job creation.