"My life has no
purpose, no direction, no aim, no meaning, and yet I'm happy. I can't figure it
out. What am I doing right?"
—Charles M. Schulz
(American, 1922-2000)
Word for the day
Psychomancy (n)
Occult communication between
souls and spirits
Malice towards none
All those who termed
Elphinston stampede as a national disaster, are distraught is Army is helping
to reconstruct the bridge!
First random thought this morning
The only tangible underperformance of the incumbent government
seems to be its inability to deliver on the expectations it keeps raising
almost on hourly basis. Otherwise everything else is part of a linear trend
that perhaps started two decades ago.
DeMo is a classic example. If the government had simply stated
that we are replacing old 500 and 1000 rupee bills with new 500 and 2000 rupee
bills to weed out the fake currency coming from Pakistan and Bangladesh, it
would have been a much simpler and smoother exercise. Projecting it as a
panacea for all corruption and non-compliance has made it look like a disaster.
Public expenditure declining in quantity and quality
PMEAC has identified reform in public expenditure as a key focus
area for stimulating the economic growth in the country.
In administrative parlance, public expenditure is a complex subject.
It involves many classifications and sub-classifications like capital and
revenue & capital expenditure, plan and non-plan expenditure, social &
economic expenditure, recurring & non-recurring expenditure, etc.
I though like to view it in simple terms. In my view, public
expenditure is the amount of money a government spends on (a) managing the
administration; (b) creating assets; and (c) discharging its social, political
and economic obligations.
The ideal situation for a developing economy, especially an
economy that is at a take off stage, is that public spending should be higher.
The incremental rise in public expenditure should ideally be used for creating
assets and enhancing social services, and administrative and financing costs
should gradually decline.
However, this has not been the case in India so far:
(a) The public expenditure as
a percentage of GDP has declined in past three decades, from a high of 19% of
GDP in FY87 to 12% in FY17.
(b) Share
of investment (capital expenditure) in public expenditure has fallen materially
in past four decades from a high of 43% of GDP in FY79 to 14% in FY17.
(c) The public
expenditure on subsidies (From 1.29% of GDP in FY79 to 1.72% in FY17) and
interest payments (From 1.73% of GDP to 3.18%) has risen sharply in past four
decades, while allocation for defense has almost halved (from 2.28% of GDP to
1.11%) in this period.
(d) The
public expenditure on social services has been generally lower in past 3 decades
(averaging 3.8% against a high of 5% in FY90). During the global financial
crisis it rose to 5.2% in FY11, and has declined steadily since.
...to continue tomorrow
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