Visualising the Indian Budget

india-budget-comparisonThe last Indian budget stood at Rs 1,020,838 crores (about 227 bil­lion US dol­lars). Take a look at this pic­ture to get a sense of how big that is. It’s slightly more than Africa’s debt to the Western world, a bit un­der the cost of a manned mis­sion to Mars, and half the Chinese government’s stim­u­lus pack­age. It’s two-thirds of Wal-Mart’s rev­en­ues, and over 4 times Bill Gates’ net worth. (See The Billion Dollar-o-gram.)

Put an­other way, it’s the in­come tax col­lec­ted from 10 lakh Sehwags or Dhonis, 1,600 Van Gogh por­traits, or just 100 res­id­ences like Antilia, Mumbai.

We de­cided to take a closer look at the budget to see how this money was be­ing spent, and how this has changed over the last 10 years, based on data from the Union Budget.

Here’s a short video giv­ing an over­view of the budget and some ob­ser­va­tions.

Let’s take a closer look:

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The budget has tripled over the last 10 years in nom­in­al terms, from 338 thou­sand crores to 1,020 thou­sand crores. But if you ad­just for in­fla­tion (us­ing WPI), it’s doubled In 2010 terms, the budget in 2000-2001 was Rs 493 thou­sand crores. That’s a 6% growth in real terms (12% nom­in­al) — about in line with the GDP growth. The graph also shows ac­cel­er­a­tion. The growth over the last 4 years was 12% in real terms — twice that over the last 10 years.

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The top ex­pense, in­terest pay­ments, is over a fifth of the budget. It has more than doubled in nom­in­al terms over the last 10 years. But in real terms, that’s not too big — just a 3% growth. The bulk of this growth has happened in the last 4 years. Interest pay­ments only ac­counts for 14% of the real in­crease in the budget.

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The Central Plan has a dif­fer­ent story, how­ever. It’s grown to the second largest item, but 10 years ago, it was just 10%. It has ex­per­i­enced the fast­est growth: 16% in real terms. In terms of con­tri­bu­tion to the real budget in­crease, this is the single largest con­trib­ut­or, at 29%.

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Subsidies have grown con­sid­er­ably as well, though not as much as the Central plan. They con­trib­ute 16% — about as much as in­terest pay­ments — to the real budget in­crease, but what’s in­ter­est­ing is the sur­pris­ingly large growth in re­cent times.

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A pat­tern that is emer­ging is the re­cent growth in ex­pendit­ure. Many items have had a sub­stan­tial in­crease in the re­cent past. Defence rev­en­ue ex­pendit­ure, pen­sions, po­lice, so­cial ser­vices, etc. have had a marked in­crease in the last year. Many oth­ers, like in­terest pay­ments, sub­sidies and cent­ral as­sist­ance have grown con­sid­er­ably over the last few years. This may be a pat­tern worth in­vest­ig­at­ing fur­ther.

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