Expenditure looking up as Karnataka govt opens purse strings

The state government has spent more, so far, this fiscal compared with the corresponding period last year - an early trend that suggests the Covid-19 pandemic may not be bad enough this time to adversely impact public expenditure.

The Finance Department is keenly tracking expenditure data reported by the administrative departments, with officials keeping their fingers crossed as there is no guarantee that the pandemic will not surge again and come in the way of government spending.

It is widely accepted that government spending increases productivity leading to economic growth.

In April and May, the government has registered an expenditure of 8.4% of the total allocation for the financial year, according to data made public by the government. This is up from 4% the government managed in April and May 2020 when the state was under a lockdown.

In terms of money, expenditure in April and May amounts to Rs 18,030.46 crore. In April and May 2020, it was Rs 8,866.45 crore.

“It’s very premature to say how things will be going forward,” Finance Secretary (expenditure) P C Jaffer told DH. “Nothing was moving in April and May last year. We hadn’t allowed any expenditure except salary and emergency. But such a strong control hasn’t been exercised this time,” he pointed out.

When the pandemic struck last year, the Finance Department kept control on expenditure. “Last year, the delegation of financial powers (to heads of departments) was less. In 2021-22, the delegation of the powers is back to pre-Covid levels,” Jaffer said.

Jaffer also admitted that the expenditure, so far, was lesser than what was achieved in the same period in 2019-20, when there was no pandemic.

In 2020-21, the government had to cut Rs 19,774 crore from 40 departments to manage costs during the Covid-19 pandemic. Finally, it achieved a total expenditure of 79.71% against total allocation last year.

“...Despite recovery, reaching pre-lockdown levels will take time,” the state’s Medium Term Fiscal Plan 2021-25 has pointed out.

In its recent expenditure authorisation directive to all departments, the Finance Department stated: “The heads of departments who are responsible for incurring expenditure should see that the expenditure be spread over evenly in all the months and avoid incurring large expenditure at the close of the financial year with the intention that the budget should not lapse.”

Expenditure is already full in the health and urban development departments, Jaffer said, adding that “we are providing them with additionalities already.”