Wednesday, July 15, 2009

Capital expenditure vs Total expenditure

If the 6.8% Fiscal deficit was not bad news enough, here is something more to be worried about.An analysis of the Plan-Capital Expenditure from the 1995-1996 budget to the 2009-2010 budget shows that the government is spending a smaller percentage of its total spending on creating new "infrastructure" ( Capex in the Plan). The capital expenditure portion of the planned expenditure has dropped from about 10% in the pre 2004 period to about 4.5% now ( Yellow line) . And we are blaming the world economy for India's slowdown ?
And look at the hockey stick in blue ( Total expenditure). Insolvency in the offing ?




Here is the table

Year Plan - Capital Expenditure Total Expenditure Plan Capex as % of Total
1995-1996 18262 183004 9.98%
1996-1997 22530 202298 11.14%
1997-1998 24510 235245 10.42%
1998-1999 26923 281912 9.55%
1999-2000 31264 303738 10.29%
2000-2001 33134 335523 9.88%
2001-2002 37320 364436 10.24%
2002-2003 41420 404013 10.25%
2003-2004 43421 474255 9.16%
2004-2005 47714 505791 9.43%
2005-2006 29638 508705 5.83%
2006-2007 28146 581637 4.84%
2007-2008 31913 709373 4.50%
2008-2009 41301 900953 4.58%
2009-2010 46751 1020838 4.58%