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.

NREGA financial performance

The Mahatma Gandhi National Rural Employment Guarantee Act funds rur­al em­ploy­ment. Their web­site provides re­ports re­gard­ing NREGA’s fin­an­cial per­form­ance. Below is a visu­al­isa­tion of their per­form­ance for the year 2009-10 (as of March 2010).

Summary of funds and spend­ing

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About 60% of the Rs 46,000 crores avail­able was fun­ded by the Centre this year, with the States con­trib­ut­ing only 12%. The bulk of the rest are from the pre­vi­ously avail­able bal­ance. This 46K crores trans­lates roughly to Rs 600 per per­son in the rur­al areas (based on the rur­al pop­u­la­tion of 74 cr in the 2011 census).

The ma­jor­ity of the spend goes to­wards un­skilled la­bour, fol­lowed by ma­ter­i­als. The total spend­ing so far ac­counts for 83% of the avail­able funds. Based on cur­rent es­tim­ates, the ac­tu­al spend will be 18% in ex­cess of the avail­able funds.

Visualisation of the State-wise data

The Visualization chart be­low shows the spend­ing by state, sor­ted by avail­able funds. The first column shows the % Spend as a ra­tio of avail­able funds. Other than Karnataka, all oth­er states have stayed with­in their fund­ing lim­its.

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The next column is a chart that shows a num­ber of things, as given in the le­gend be­low, which helps with the way to read the ac­tu­al chart.

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You can see, based on this, that

  • Karnataka and Orissa were fun­ded en­tirely by State funds rather than Central funds, while most oth­er states were fun­ded pre­dom­in­antly by Central funds.
  • Most states have spent more than the funds re­leased in the cur­rent year, and are eat­ing in­to their bal­ance.
  • Some states are in danger of of ex­ceed­ing the avail­able funds, and quite sig­ni­fic­antly. Rajasthan, Madhya Pradesh, Andhra Pradesh, Bihar and Jharkard in par­tic­u­lar.

The spend per cap­ita column shows the amount spent per per­son in the rur­al areas, and the es­tim­ated spend per per­son. The rur­al pop­u­la­tion for the state is based on the 2011 census data.

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The North-Eastern states of Tripura, Nagaland, Manipur and Mizoram are the ones that re­ceive the highest as­sist­ance per-capita. Outside of these, Rajasthan and Himachal Pradesh too have a fairly high level of per-capita as­sist­ance.

The last column shows the mix of spend­ing. Most states spend on un­skilled la­bour and ma­ter­i­als, and very little else. The only ex­cep­tions are:

  • Jammu and Kashmir, which has a reas­on­able ex­pendit­ure on skilled la­bour, fol­lowed by Maharashtra and Nagaland
  • Goa, which has a fairly large com­pon­ent of re­cur­ring ad­min­is­trat­ive ex­penses
  • Tamil Nadu, which seems to be spend­ing al­most noth­ing on ma­ter­i­als, and fo­cuses en­tirely on un­skilled la­bour

For the raw data, please vis­it the NREGA web­site.