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WHAT IS REVENUE EXPENDITURE OF THE GOVERNMENT

Those expenditures of the government that do not lead to the creation of fixed assets are called revenue expenditures. The government spends money under various accounting heads, such as paying interest on loans, salaries and pensions, subsidies, spends on different ministries and departments, etc. Grants made to state governments and other parties are also treated as revenue expenditures, even though these might be used for the creation of fixed assets.
 
Budget Estimates (BE) for 2018-19 pegged the Indian government’s revenue expenditure to have grown 10.2 per cent over the Revised Estimates (RE) for 2017-18. That was a big drop from over 15 per cent growth in the preceding year. 
 
The Union government had cut its total expenditure by about Rs 1.45 trillion over its revised estimates for 2018-19. Of this, Rs 13,000 crore was cut on account of capital expenditure and Rs 1.32 trillion under revenue expenditure.
 
The bulk of the expenditure compression was achieved through off-Budget borrowing. The burden of such borrowing fell on many public sector undertakings (PSU), such as Food Corporation of India (FCI), Housing and Urban Development Corporation, National Housing Bank and Rural Elec­trification Corporation.
 
Even though there is no official confirmation of such borrowing, the figures put out by the Controller General of Accounts (CGA) revealed it all. For instance, the CGA’s 2018-19 figures showed how the food subsidy bill came down by a whopping 40 per cent over Rs 1.71 trillion mentioned in the revised estimates. 
 

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