DEVELOPMENT FINANCE
BUDGET ANALYSIS KERALA
2008-09 . 2009-10 . 2010-11
HUMAN DEVELOPMENT
Kenny P. Joy (URP 0910)
.
P r a s a n t h C. Varughese (URP1710)
Budget Analysis Kerala
CONTENTS •Introduction •Total Income & Expenditure •Revenue in Capital Breakup • Income Break up •Capital Income breakup •Revenue income breakup •Expenditure on •Economics •Social services •General services •Development v/s Non- development expenditure •Expenditures on HDI •Debt services
Development Finance
Budget Analysis Kerala
Development Finance
INTRODUCTION Kerala State is the one of the leaders in the country in social development and proved its development successful through its High Human Development Indices (sharing its Global ranking along with Highly developed countries of the West.) This Budget analysis along with the basic revenue – expenditure analysis, also inspects this model of development through the state budget expenditure patterns on those parameters/ sectors which contribute to creating a better Human Development Index. BUDGET SIZE
Budget Analysis Kerala
Development Finance
TOTAL INCOME & EXPENDITURE ITEMS GSDP(at current prices) Revenue Receipts (A) Revenue Expenditure (B) Revenue Deficit (-)/Surplus (+) (C=A-B) Revenue Deficit as a % of GSDP Miscellaneous Capital Receipt(E) Capital Accounts Receipts (D) Capital Expenditure (F) Net Loans and Advances (G) Fiscal Deficit(-)/ Surplus(+)(H=A+E+G-B-F) Fiscal Deficit as a % of GSDP
Receipts Growth rate Expenditure Growth rate
Amount in crore Rs.
2008-09 162659 24512.18 28223.85 -3711.67 2.28187189 9.11 6231.67 1695.60 983.69 -4414.47 2.71394144 2008-09 0.287 0.279
2009-10 177209 26109.40 31132.38 -5022.98 2.83449486 48.96 7999.74 2059.39 876.68 -6156.73 3.47427614
2010-11 193383 30990.95 34664.81 -3673.86 1.899784366 24.61 7807.42 3363.69 761.74 -6251.20 3.23254888 2009-2010 0.307 0.309
•Revenue expenditure larger than revenue which increases liabilities and the budget is not healthy. •No considerable creation of capital assets. •Fiscal deficit is in increasing line despite of the fiscal responsibility act 2003 which has a ceiling limit of 2 %.This can be attributed to the increase in revenue expenditure.
Budget Analysis Kerala
45000.00
Total Receipts
40000.00
Total Expenditure
Development Finance
35000.00
40000.00
Revenue Receipts
40000.00
35000.00
Revenue Expenditure
35000.00
30000.00
30000.00
25000.00
25000.00
20000.00
20000.00
15000.00
15000.00
10000.00
10000.00
10000.00
5000.00
5000.00
5000.00
30000.00 Axis Title
25000.00 20000.00 15000.00
0.00 2008-09 2009-10 2010-11
GSDP (Current)
0.00
Revenue Expenditure Capital Expenditure
0.00 2008-09 2009-10 2010-11
Growth rate 2009-10 8.95
2008-09
2009-10
2010-11
Growth rate 2009-10 9.13
•The budget upfront shows at 2010 at par receipts and expenditure. •Revenue expenditure is on increase which can be attributed to the large share of administrative expenses. The income generated is used to run the system rather than increasing assets and reducing liabilities. •High spending in social sector is also one of the major reasons for high revenue deficit and resultant fiscal imbalance in the state.
Budget Analysis Kerala
Development Finance
TOTAL INCOME (RECEIPTS) 2010-11 Growth rate 1 Growth rate 2
ITEMS
2008-09
Tax Revenue (%)
65.23361
67.5045
70.09043
10.22402
23.24349
Non Tax Revenue (%)
6.361287
7.094073
6.230174
18.78611
4.241937
28.4051
25.40143
23.6794
-4.74743
10.64977
100
100
100
6.516026
18.69652
Central Govt. Transfers(%) Revenue Receipts
2009-10
120 100 80
Central Govt. Transfers
60
Non Tax Revenue
40
Tax Revenue
•Contribution of central to the state in form of transfers is reducing which is stressing the state government in finding revenue. •The per capita tax revenue is increasing over the three years taken .
20 0 2008-09
2009-10
2010-11
ITEMS Per capita tax revenue
2008-09 4847
2009-10 5249
2010-11 6269
Budget Analysis Kerala
Development Finance
TRENDS IN TAX & NON TAX REVENUE Item Tax revenue Tax revenue(%)to total Share of Central taxes % Share of Central taxes to total % Share of Central taxes to tax revenue Share of state taxes and duties % Share of state taxes and duties to total % Share of state taxes and duties tax revenue. Non tax revenue % of Non tax revenue to total Interest Receipts. % to total other non tax revenue %to total. Total revenuue
Amount in crore Rs.
2008-09 2009-10 2010-11 20265.7 22023.8 26863.54 82.68 84.35 86.68 4275.52 4398.78 5141.85 17.44 16.85 16.59 Tax revenue 21.1. 19.97 19.14 15990.18 17625.02 21721.69 65.23 67.5 70.09 78.9 4246.47 17.32 83.69 0.34 4162.79 16.98 24512.18
80.03 80.86 4085.6 4127.4 15.65 13.32 152.5 171.47 Non Tax 0.58 0.55 Revenue. 3933.1 3955.94 15.06 12.76 26109.4 30990.95
•State finding its own sources of revenue. •States contribution to the total revenue is increasing. On the contrary central share is reducing.
Budget Analysis Kerala
Development Finance
GRANTS IN AID FROM CENTRE ITEMS Non - plan grants Railway passenger Central road fund Calamity relief fund Others Total
State plan grants Block grants Art 275(1) grants Fin. Comm. Grants Others Total Grants for central plan Grants for centrally sponsored schemes Total
Amount in crore Rs.
2008-09
2009-10
2010-11
Budget Analysis Kerala
Development Finance
REVENUE & CAPITAL EXPENDITURE
Social Service
Economic Service Assignment to LSG Total Revenue Expenditure
ITEMS CAPITAL REVENUE Total CAPITAL REVENUE Total CAPITAL REVENUE Total Plan Non- Plan Total
Amount in crore Rs.
2008-09 29051 936284 965335 140426 392853 533279 0 185896 185896 5461.87 25441.27 28223.85
2009-10 36362 1046715 1083078 169576 424072 593648 0 220073 220073 6785.41 27283.03 31132.38
2010-11 47924 1211080 1259004 288445 435746 724191 0 245032 245032 7280.71 31509.53 34664.81
Budget Analysis Kerala
Development Finance
EXPENDITURE ON SOCIAL SERVICES
Amount in crore Rs.
2008-09 543440 184730 237165 965335 30903.14
ITEMS Education Medical, Public Health & Family Planning Other Social Services Total Social Services Total Expenditure
2009-10 602925 226983 253170 1083078 34068.44
2010-11 693336 256585 309083 1259004 38790.24
% of Exp. Of social services to total exp.
% of Exp. of Social Services 0.326 0.324 0.322 0.32 0.318 0.316 0.314 0.312 0.31 0.308 0.306
120 100 Other Social Services 80 2008-09
2009-10
2010-11
SPR (Social priority ratio)has increased
Medical, Public Health & Family Planning
60 40
Education
20 0 2008-09
2009-10
2010-11
Budget Analysis Kerala
Development Finance
ITEMS Share of social sector plan expenditure Share of plan expenditure to total expenditure Total Plan Expenditure Total Social Services Total Expenditure
2008-09
2009-10
5461.87 9653.35 30903.14
6785.41 10830.78 34068.44
2008-09
2009-10
2010-11
7280.71 12590.04 38790.24 2010-11
Expenditure on Social services
2838
3250
3902
Expenditure on Economic services
1191
1152
1198
Budget Analysis Kerala
Development Finance
EXPENDITURE ON ECONOMIC SERVICES 8000
Amount in crore Rs.
Others
% Exp. on economic services
7000
Forest
6000 Transport & Communication
5000
% of Exp. On econ. Services to total
0.19 0.185 0.18 0.175 0.17 0.165 2008-09
2009-10
2010-11
Industries, Labour & Employment
4000
3000
2000
1000
0 2008-09 2009-10 2010-11
ITEM Growth rate 1 Growth rate 2 Agriculture, Animal Public 23.38417 29.07593 Husbandry & Co-operation Works(Roads & Bridges) Irrigation -8.84808 13.36996 Public Works(Roads & Irrigation 10.37322 3.281949 Bridges) Industries, Labour & 17.25191 39.0625 Employment Transport & Communication 57.34266 40.88889 Agriculture, Animal Forest 6.796117 1.818182 Husbandry & CoOthers -12.1212 59.48276 operation Total Economic Services 11.31332 21.99562
Budget Analysis Kerala
Development Finance
DEVELOPMENT V/S NON- DEVELOPMENT EXPENDITURE ITEM Development Expenditure Social Service Capital Revenue Economic Service Capital Revenue LSGIs Capital Revenue Non-Development Expenditure Capital Revenue Total Expenditure
2008-09 1684510 965335 29051 936284 533279 140426 392853 185896 0 185896 1307353 0 1307353 30903.14
2009-10 1896799 1083078 36362 1046715 593648 169576 424072 220073 0 220073 1422378 0 1422378 34068.44
2010-11 2228227 1259004 47924 1211080 724191 288445 435746 245032 0 245032 1574623 0 1574623 38790.24
•The development expenditure holds mainly social, economic and LSG allocations of which social sector allocations hold the larger share. •If coupled with rural development(allocations to the LSG’s), the share indicates that the budget is pro human development.
40000 30000 20000 10000 0
Development Expenditure Non-Development Expenditure
Devpt Exp. / Total (%) 58.00 57.00 56.00 55.00 54.00 53.00 2008-09 2009-10 2010-11
Budget Analysis Kerala
Development Finance
PUBLIC DEBTS
Amount in crore Rs. RECEIPTS DISBURSEMENTS RECEIPTS DISBURSEMENTS RECEIPTS DISBURSEMENTS
2007-08 Internal Debt of the State Government 122,12 Loans and Advances from The Central Government 4,16 Total 126,28 14,000 12,000 10,000 8,000 6,000
Loans and Advances from The Central Government
2007-08
2008-09
2009-10
2009-10
81,62 100,74
52,79
66,93
21,39
2,55 7,68 84,17 108,42
2,92 55,71
5,62 72,5
2,65 24,05
14,000
RECEIPTS
12,000 10,000
Internal Debt of the State Government
2008-09
8,000 6,000
4,000
4,000
2,000
2,000
0
0
DISBURSEMENTS
•Debt repayment ratio is reducing.
Budget Analysis Kerala
Loans
ITEM Loans for housing Loans for water supply and sanitation Loans for urban development Loans for Co operatives Loans for Agriculture & allied activities. Loans for industries Loans for power projects Loans for other Rural devlpt progrms. Loans for other purposes. Total
Development Finance
2008-09 261.1 379 1.7 64.87 1.11 111.33 5.7 1.56 157.3 983.69
2009-10 6.86 324.27 87.75 4.75 2.36 121.86 0.5 0 328.33 876.68
2010-11 54.21 99.17 1 141.26 0.21 201.2 0 0.9 263.79 761.74
Budget Analysis Kerala
Development Finance
PER CAPITA VALUES ITEMS
2008-09
2009-10
2010-11
Per capita Expenditure on Social Services
2838
3250
3902
Per capita Expenditure on Economic Services
1191
1152
1198
Budget Analysis Kerala
Development Finance
ALLOCATION ON HDI INDICATORS - EDUCATION 8000
Growth rate 1 Growth rate 2 Loans
7000 Capital outlay
6000
Art and culture
Special education
5.820106
51
General education
-23.4754
-20.898
Technical education
12.21006
16.58418
Sports & youth welfare
151.3139
-42.8218
Agriculture education
48.33415
-5.73113
Art and culture
32.44401
11.00473
Special education
Medical education
14.52649
70.63891
Primary education
Capital outlay
59.2533
72.97898
General education
Secondary education 0 2008-09
2009-10
2010-11
11.46228 16.77101
Technical education
1000
10.7156 9.003182
Sports & youth welfare
2000
28.91774
Primary education
Agriculture education
3000
Secondary education
5.091187
Medical education
5000
4000
University education
University education
•Allocation for education- is growing in higher education sectors as the primary education sector is already well developed. •Stress on agriculture and share is coming down – priority is coming down.
Budget Analysis Kerala
Development Finance
ALLOCATION ON HDI INDICATORS - HEALTH
120
% Split up of Health expenditure
100 80 60 40 20 0
2008-09 Medical establishment
2009-10 2010-11 Hositals and dispensaries
Aurveda
Homeo
Medical college and schools
Employee state insurance scheme
Others
Prevention of food adulteration
Drugs control
Prevention and control of diseases
Public health education and training
Public health Laboratories.
Other programmes.
Family welfare
Capital outlay.
Item Medical establishment Hositals and dispensaries Aurveda Homeo Medical college and schools Employee state insurance scheme Others Prevention of food adulteration Drugs control Prevention and control of diseases Public health education and training Public health Laboratories. Other programmes. Family welfare Capital outlay.
GR 1 -0.03243 0.029166 0.132156 0.046064
GR2 1.033515 0.082816 0.10621 0.185148
0.145265 0.706389 0.080595 -0.03143 0.114811 -0.34209 0.104129 0.156098 0.13748 0.079137 0.188296 -0.00238 0.135861 0.128234 0.222798 -0.54676 0.107406 0.400626
0.22952 -0.33333 0.096735 0.577015
*GR 1 – growth rate 2008-09 to 2009-10 GR 2 – growth rate 2009-10 to 2010-11
Budget Analysis Kerala
Development Finance
•The problems pertain more to the nature of quality of services of basic amenities extended to the people than those of the quantity issues. •In terms of health and education, the problems being faced by Kerala have been referred to as the ‘second generation problems’ indicating the next stages of concerns after the achievement of the specific goals in literacy, school attendance, reduced fertility and mortality rates and other health related indicators. •The development process in Kerala is more of public policy led rather than growth-led. •Human development expenditure ratio (HER), social priority ratio (SPR) and human development expenditure as a percentage of total expenditure - All the three ratios have declined sharply in Kerala as well as other major states of the country. •Despite very high tax effort, the state continues to have large fiscal imbalances because of very high revenue expenditure largely driven by committed expenditures. •On the expenditure side, while there has been a high priority given to the social sector spending, the share of total social sector spending to total plan spending has declined since the tenth plan period.
THANK YOU
Budget Analysis Kerala
Kenny
P. Joy
Development Finance
.
Prasanth C. Varug h ese