Earmark 40% in Budget for capital expenditure, says former MP

Ramadass urges Chief Minister N. Rangasamy to present a visionary Budget promoting growth in employment, economy and social justice

While welcoming the government’s preparations to present a full-fledged Budget for 2023–24 instead of a vote-on-account, former Member of Parliament M. Ramadass urged Chief Minister N. Rangasamy to use the occasion to present a visionary Budget promoting growth in employment, economy and social justice.

In a statement, Mr. Ramadass said the proposal to present a full-fledged Budget for the fiscal year on March 13 signifies a transition from the 12-year era of interim Budgets.

“Given the enhanced Central assistance and greater buoyancy of own resources this year, it is possible for the government to present a visionary Budget promoting growth in employment, economy and social justice in the Union Territory”, he said.

He suggested that the Chief Minister enhance the value of the Budget through simple but effective innovations. “In view of the fact that during the interim Budget era, capital expenditure was a victim, the government should boldly come forward to earmark 40% of its total expenditure for capital expenditure,” he said.

Mr. Ramadass called for categorising the Budget into four components, of which one could be devoted to expenditure schemes and proposals. A classification of expenditure into Revenue Expenditure (salaries, pensions, principal and interest amounts to be repaid, purchase of electricity, old age pension, welfare schemes, grants in aid) and capital expenditure (outlays on proposed new schemes) may be in order.

Another part of the document could detail the impact of government spending of ₹10,696 crore in the last Budget. The outcome of the schemes and investments made last year in terms of their achievements, deliverables, and shortcomings, a status report of schemes announced in an earlier Budget, and all unproductive schemes that result in leakages and eat away public money should be dropped this year, he said.

In view of the Central government’s decision to stop the GST compensation, combining the Revenue with the Expenditure, the deficit in the Budget can be gleaned from the revenue deficit, primary deficit, and fiscal deficit. The government should try to meet this deficit by restricting open market borrowing to ₹1,000 crore this year, Mr. Ramadass said.