Budget 2020 – Intent vs Action

Budget 2020 – Intent vs action

The department wise allocations made in the budget make some noteworthy readings. Some of the key highlights could be noted as below:

·The department wise allocations are highly skewed. Out of the total 67 departments & ministries, the top 7 account for 75.4% of the total budgetary allocation. Next 21 departments are allocated 19.76% of total allocation and the rest 39 departments get a meager 4.84% of the total allocation.

·Food & Agriculture together account for 28.5% of the total budgetary allocation. Out of this 9% of total is allocated alone for the PM Kisan scheme. In FY20RE, 28% of the budget allocation to this item remained unspent.

·Despite the urgent need for raising agriculture productivity and government emphasis on this, the department of agriculture research and education is allocated a paltry 0.3% of the budget.

·Despite strong emphasis on the alternative medicine and promotion of traditional methods , the Ministry of Ayush is allocated a paltry Rs136cr or 0.01% of total allocation.

·The budget speech emphasized on lower use of chemical fertilizers. Accordingly Urea subsidy has been reduced to 5.7% of total allocation from 6.2% FY20RE. However it continues to be 2x of the nutrient based subsidy.

·Despite ambitious target for regional connectivity, the allocation to this head has been reduced as compared to FY20BE.

·The allocation for promotion of industry and internal trade has been reduced to Rs57.27bn against Rs58.34bn in FY20RE.

·Department of Food and PDA is allocated Rs1.21trn in FY21BE. However, only a measely Rs1.9bn are allocated towards capital expenditure by this department. This is depsite hge promise to improve food warehousing.

·The ministry of culture is allocated 0.07% of the total allocation. Despite the big promise, only Rs1.8bn are allocated to development of museums.

·Rs269bn are allocated for procurement of aircrafts and aeroengines by the Air Force.

·Ministry of Electronic and IT is allocated 0.48% of the total allocation. The allocation for promotion of digital payment has been less than halved to Rs2.2bn as compared to Rs4.8bn in FY20RE.

·The Mof Environment, Forst and Climate Change is given 0.12% of the total allocation. Rs12cr are allocated for Hazardous Substance Management, and Rs460 crore for pollution control.

·Allocation for Nepal, under Ministrty of External Affairs has been cut to Rs8bn vs Rs12bn in FY20RE.

·Nothing is provided for bank recapitalization in FY21BE. Rs69.5bn are provided for recapitalization of insurance companies.

·The allocation for Ministry of Housing and Urban Affairs has been reduced to 2.5% in FY21BE from 2.8% in FY20RE. 81% of this allocation is twoards metro projects.

·A princely Rs10cr are allocated to Pradhan Mantri Innovative Learning Programme (DHRUV). Overall, Department of School Education and Literacy gets 0.06% of total allocations.

·Department of higher education gets 1% of the total allocation. But 50% of this allocation is for Higher Education Financing Agency (HEFA) and Interest Subsidy and contribution for Guarantee Funds.

·The allocation to National River Conservation Plan has been cut for Rs12bn in FY20RE to Rs8.4bn in FY21BE. Rs60cr are allocated for much talked about implementation of National Water Mission.

·0.3% of the total allocation is reserved for PM employment generation program (PMEGP).

·4.28% of the total allocation is appropriated towards LPG subsidy.

·Railways is allocated 8.4% (Rs700bn) of the total budgetary allocations. However only Rs2.7bn is allocated for creating/improving passenger amenities.

·Ministry of Road Transport & Highways is allocated Rs916.56bn or 11% of the total allocation. However, a meager Rs3.8bn are given for Research, Training, Studies and Other Road Safety Schemes.

·Department of Science and Technology gets 0.4% of the total allocation.

·Ministry of Tourism gets 0.02% of the allocation. Half of this allocation is towards Integrated Development of Tourist Circuits around specific themes (Swadesh Darshan)

·Ministry of Youth Affairs gets 0.2% of the total allocation. Half of this allocation is towards Khelo India program.





Author: Midas Finserve

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