How non plan expenditure is wasteful

In my earlier blogs, I have mentioned that non plan expenditure is wasteful. Let us examine a few figures to understand this point.

The recent budget has earmarked Rs 735,657 towards non plan expenditure. Debt servicing accounts for Rs 248,664 crores , defence (revenue expenditure) for Rs 87,344 crores, subsidies for Rs 116,224 crores and pensions for Rs 42,840 crores. These are all expenses that do not really contribute to the creation of long term income generating assets. There are many other non productive items but I have only mentioned some of the more important ones. If our government is serious about fiscal discipline, it should make some efforts to control them. True in the recent budget, some effort has been to cut subsidies ( by about Rs 15,000 crores ) and defence services (by about Rs 1000 crores). But this is not enough. Meanwhile, the debt servicing burden has increased by about Rs 30,000 crores over the past year. Over the same period, the total non plan expenditure has increased by about Rs 30,000 crores.

These figures show that a lot more has to be done to bring back fiscal discipline.