Kerala Finance Minister Thomas Isaac hopes to tweak expenditure pattern
THIRUVANANTHAPURAM: There seems to be nothing much finance minister T.M. Thomas Isaac can do to improve revenue in his Budget this time. Therefore, according to sources, Dr Isaac will attempt to rework expenditure priorities in his 2017-18 Budget. There are hints in the Governor’s address that agriculture and drinking water will get unprecedented impetus. The state’s expenditure had swelled by nearly 100 per cent in the last five years but, like cholesterol for the body, expenditure is necessary for the health of the state. Again, like in the case of cholesterol, it is the expenditure mix that is troubling the state, and which Isaac will hope to alter in coming fiscal.
While all that is bad about burgeoning expenditure — revenue expenditure and revenue on general services — is rising, things that are nice about expenditure — capital expenditure and the expenditure on social and economic services — are falling. “Between 2010-2015, the inadequate growth rate of capital expenditure (26 per cent) and expenditure on loans and advances (negative growth) indicated Government’s low priority towards development activities,” a top finance department official said.
Relative shares of three components in total expenditure showed that expenditure on general services has been increasing steadily during the last three years whereas expenditures on social and economic services are decreasing. While expenditure on general services (pension, interest payment and servicing of debt) increased by over one per cent in the last five years from 40 per cent to 41.1 percent, that of economic services (agriculture, irrigation and flood control, drinking water, power and energy, transport) fell from 18.4 per cent to 17.5 and social services (general education, health and family welfare, water supply, sanitation, housing and urban development) fell from 32.4 per cent to 32 per cent.
“This shows increasing commitment on running Government machinery at the expense of development and welfare services. Such a spending pattern is under the serious scrutiny of the minister,” the source said. Share of interest payments in total expenditure also increased during the last three years indicating burden on payment of interest due to increase in borrowings. That the state’s expenditure is wayward is borne by the fact that its share of development expenditure, capital expenditure and social sector expenditure in total expenditure has not just been decreasing but is far below the general category states.
