In the first nine months of the financial year FY24, several Union ministries exhibited a notable trend of utilizing only around two-thirds of their revised budgetary allocations. The Union finance ministry disclosed that the actual total expenditure from April to December amounted to ₹30.41 trillion, compared to the revised allocation of ₹44.90 trillion across 56 ministries.
Among the ministries with substantial allocations, the railways and the ministries of road transport and highways made significant progress, utilizing up to 85% of their allocations. Similarly, the defence ministry recorded about 71% utilization during this period.
For instance, the ministry of railways, with an allocation of ₹2.43 trillion for FY24, had expended ₹2.08 trillion by December 31. Similarly, the ministry of road transport and highways utilized ₹2.28 trillion of its ₹2.76 trillion allocation. However, other ministries reported lower utilization rates. The consumer affairs, food, and public distribution ministry utilized about 64% of its allocation, while the education ministry utilized approximately 46%, and the ministry for micro, small, and medium enterprises recorded around 23%.
Specifically, the ministry of education, allocated about ₹1.3 trillion for FY24, expended only about ₹592 billion by December 31. Similarly, the consumer affairs, food, and public distribution ministry, with an allocation of ₹2.22 trillion, spent ₹1.39 trillion during the same period.
Experts suggest that a significant portion of central government ministries’ expenditure occurs in the final quarter of the fiscal year, as payments for various projects and schemes are cleared during this period. N.R. Bhanumurthy, Vice-Chancellor at Dr. B.R. Ambedkar School of Economics University, Bengaluru, pointed out that funding for many projects typically materializes in the last quarter, and there may also be savings from improved utilization of schemes and projects.
Moreover, ministries with high allocations, such as finance and rural development, also demonstrated prudent spending. As of December 31, the finance ministry had spent around 66.2% of its allocated ₹16.27 trillion, while the rural development ministry had utilized approximately 63% of its allocated ₹1.73 trillion.
Looking ahead, the expenditure profile for the fiscal year 2024-25 projects a total expenditure of ₹47.66 trillion for various central government ministries and departments, representing an increase from the revised estimate of ₹44.90 trillion for FY24. The estimated revenue expenditure for FY25 is ₹36.55 trillion, with capital expenditure projected at ₹11.11 trillion.
Overall, while some ministries have demonstrated commendable spending efficiency, others have room for improvement in utilizing their allocated funds effectively. The government’s emphasis on prudent financial management and optimized expenditure remains crucial to ensure the efficient utilization of resources and the successful implementation of developmental initiatives across various sectors.