Skill development, corporate affairs ministries top H1 FY27 underspenders

Two ministries — those of skill development & entrepreneurship, and corporate affairs — spent just 8 per cent of their allocations under the FY27 Budget Estimates (BE) in April-September this financial year — this, when the finance ministry has begun pre-Budget consultations for the next Budget.

According to the latest data with the Controller General of Accounts (CGA), of the 47 ministries and departments that have a BE of more than ₹3,000 crore, only 19 had used more than 45 per cent of it.

The Ministry of Coal’s rate is 14 per cent while the Ministry of Jal Shakti and Ministry of Minority Affairs spent just 16 per cent and 17 per cent, respectively.

Among other slow spenders, the Ministry of Jal Shakti also recorded the largest shortfall in absolute terms, having used ₹15,336 crore against its full-year allocation of nearly ₹95,000 crore.

Several other major ministries too have recorded slow progress.

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The Ministry of Rural Development used 31 per cent of its allocation of ₹1.97 trillion while the Ministry of Education spent 25 per cent of its allotment of ₹1.40 trillion.

The Ministry of Housing and Urban Affairs achieved 31 per cent of its ₹85,522 crore. 

At the other end of the spectrum, the Ministry of Railways emerged as the fastest spender, having used 77 per cent of its ₹2.81 trillion, followed by the Ministry of Mines at 75 per cent.

The Ministry of Chemicals and Fertilisers spent 69 per cent while the Ministry of Consumer Affairs, Food and Public Distribution, and the Ministry of New and Renewable Energy rang up 66 per cent and 64 per cent, respectively.

The Centre met nearly 48 per cent of its BE for expenditure in April-September (H1FY27) with a spending of ₹25.50 trillion.

The government has exhausted 42 per cent of its fiscal-deficit target during the first half of FY27.

State Bank of India in a research note said it expected the central government to exceed its fiscal-deficit target of 4.3 per cent of gross domestic product in FY27 by 40 basis points due to excise duty cuts, a higher subsidy bill and the base-year revision. “The only possible option with Government to contain fiscal deficit within Budget Estimates is to cut in expenditure,” it added.

Among ministries with some of the largest budgetary apportionments, the Ministry of Defence spent 53 per cent of its ₹7.85 trillion, while that of Home Affairs notched up 54 per cent of its ₹2.55 trillion.

The Ministry of Finance, which has the largest allocation of ₹19.73 trillion, had spent ₹8.28 trillion, or 42 per cent of its BE, by the end of September.

Its large allocation is partly on account of interest payments, which accounted for more than three-fourths of the ministry’s expenditure during H1FY27.

The Ministry of Road Transport and Highways, one of the government’s major infrastructure spenders, used 58 per cent of its annual allocation of ₹3.10 trillion.

The Ministry of Petroleum and Natural Gas spent 63 per cent of its allocation while it was 39 per cent for the Ministry of Power.

Trends in capex 

The Ministry of Railways also led in capital expenditure (capex), having spent 67 per cent of its FY27 allocation by September.

The Ministry of Road Transport and Highways followed at 57 per cent, while the Ministry of Defence and Ministry of Housing and Urban Affairs scored 44 per cent and 43 per cent, respectively. 

The Ministry of Science and Technology was the slowest in capex, having spent just 2 per cent of its annual allocation.

In absolute terms, the ministry spent only ₹425 crore against its FY27 capex BE of around ₹20,091 crore.

The Centre’s overall capex stood at ₹6.55 trillion in H1FY27, accounting for nearly 54 per cent of its full-year target.

Capital expenditure has been the key tool in the Centre’s economic strategy in the last five years. The government ramped up its own capex to revive the economy in the aftermath of the pandemic.

With the capex aim of ₹12.22 trillion set for FY27, the government has nearly tripled its spending since FY21.