Statsguru: Six charts show average variation in the Budget estimates

On February 1, Union Finance Minister Nirmala Sitharaman will present the last full Budget of the second Narendra Modi government. While the Budget size is expected to expand further, a Business Standard analysis found the average variation in the Budget Estimate and actuals has been 5.26 per cent. In the ten years between 2012-13 and 2021-22, the government has been able to meet its Budget Estimate (BE) only four times (chart 1). The performance on the tax front has been similar, where the government is expected to exceed its BE (chart 2). The Revised Estimate (RE) for tax collections for 2021-22 was 14.2 per cent higher than BE.

Besides presenting the BE for the coming year, the Budget document gives the RE for the current year and the actual numbers for the previous year. The difference in divestment has been even higher, as the RE for 2021-22 was 55 per cent below the BE for that year. The government’s performance has been dismal in this regard. In eight of the 10 years, the government missed its Budget target (chart 3). An analysis of the targets from tax revenue collections and divestments shows that the difference between the Budget and actual numbers widened in the years after the government met its targets. The capex performance has improved over the last four years.

Since 2018-19, the government has overshot its capital spending targets for each year (chart 4). In the social sector, education spending has met the target in only one of the 10 years for which data was analysed. The difference between the BE for 2021-22 and the RE was 5.6 per cent (chart 5). Health, on the other hand, has witnessed a better performance. Although the pandemic led to overshooting of health targets, the government’s performance with regard to health expenditure had improved starting 2015-16 (chart 6). The RE for 2021-22 was 15.2 per cent higher than the BE.