The Expenditure Budget by government highlights the allotment of funds for disbursement to different ministries, sectors, departments in a financial year in a part of the Union Budget. The allotments are made by Plan and non-Plan estimates for departments and ministries concerned.
Government prepares the expenditure portfolio in three different documents:
1. Expenditure profile: The expenditure profile compiles related data across all ministries and departments to make a profile of the general financial performance of the government. One of the explanatory documents which aid economic analyses. The statements contained in this document are prepared on the basis of data by ministries. Some of the statements are made on the data contained in the Expenditure Budget. It has Budgetary trends on gender Budget, the welfare of women and children, resource allotted for the northeastern states and welfare of SC/STs.
2. Demand for Grants: It is the document in which estimates of expenditure from the consolidated fund of India are given in pursuance of Article 113 of the Constitution. They are included in the annual financial statement and are needed to be voted upon in the Lok Sabha. The demands for grants have both charged and voted expenditure. These again classified as revenue and capital expenditure.
3. Expenditure Budget: As explained above, the Expenditure Budget have details and estimates of the amount to be allocated for different ministries and departments for their proper functioning in a given financial year.
The parts of Expenditure Budget?
The Expenditure Budget is again divided into capital expenditure and revenue expenditure.
Capital Expenditure: This expenditure pertains to amount spent on the creation of assets and is for a reduction in liabilities for the government. It is non-recurring in nature and adds to the capital stock of the economy, raising its productivity by long-term developmental programmes and welfare schemes — for instance, construction of metro rail networks, highways, ports, etc. It also have the loans given to Union Territories and states, and repayment of borrowings.
Revenue Expenditure: Revenue Expenditure details of expenditure that neither creates assets nor causes a reduction in liability. It is recurring in nature and is incurring on the normal functioning of the government. The allocations under Revenue Expenditure have payment of salaries, pension, interests, expenditure on administration, defence, health, and other services in the country.