To ensure transparency in budget making, every government should make efforts to ensure that funds are not allocated under the omnibus “minor”, “sundry”, “miscellaneous” or “secondary” head. Instead, there should be a clear emphasis on allocating funds under specifically identified programmes and schemes. Yet, in the budget for the financial year 2014-15, the Gujarat government has proposed to use up to Rs 15,809 crore – or 11.85 per cent of the total budget – under the so-called secondary or minor head. A set of rules should have, in fact, governed the budget-making exercise of the Gujarat government so that public finances are properly utilized and spent in a most transparent manner. This is particularly important because public funds are made up of taxes collected from the people. It goes without saying that people in general have the right to know how the taxes collected from them are being utilized. All information about this should be made public.
While making the budget, every government gives details of the heads under which particular funds allocated are to be used up. These allocations are identified under specific codes, which are in four digits. The expenditure is divided into two categories – revenue and capital. Under each principal head, there are sub-heads for which funds are allocated, and codes are given to each. For instance, in the Gujarat government budget books, under general education, the major head of revenue expenditure is provided under the 2202 code, while capital expenditure is identified under the 4202 code. A further breakup of the proposed expenditures relate to expenditures on specific schemes and programmes.
When the government fails to identify any schemes or programmes, it usually seeks to allocate funds under a vague “secondary” head, which is also referred to as “minor head”. These are also provided a unique code – 800. There is no clarity on where the amount falling under this head would be used, and this goes against the very spirit of transparency. The issue requires particular examination because it is all taxpayers’ money which is to be used. This happens despite clear-cut view that, as far as possible, one should not seek to allocate funds under unnamed sundry expenses, especially when the amount is as very big.
The Comptroller and Auditor General (CAG) report on Gujarat finances, of March 2013, says, “During the past two decades, the range and diversity of Government activity had increased manifold”, and so have allocations under “minor heads”. It adds, “The omnibus Minor Head 800 –accommodates the expenditure which could not be classified under available programmes… Classification of large amounts under the omnibus Minor Head 800 – Other Expenditure/Receipts – affects transparency in financial reporting.”
CAG further says, “Account of various important items of expenditure relating to various sectors, revenue receipts etc. under omnibus Minor Head – 800 results in non classification of diverse activities of the Government under available heads. In order to ensure greater transparency in financial reporting, large amounts received or expended under various programmes should be depicted in accounts distinctly, instead of clubbing the same under the Minor head ‘800-Other expenditure’ and ‘800-Other receipts’.”
CAG notes that in 2012-13, there were in all 71 heads of both revenue and capital expenditure accounting for Rs 11,062.38 crore or 12.71 per cent of the budget which was put under “sundry” expenditure, which it underlined was a big amount. Analysis by Pathey Budget Centre suggests that in 2013-14 and 2014-15, there were 68 and 44 such heads respectively, under which “sundry” or “minor” expenses were put.
In the 2014-15 Gujarat budget, released in July this year, the departments which did not allocate anything under the minor heads were legislative and parliamentary affairs and tribal affairs. Some departments such as sports, youth and cultural activities, roads and buildings, information and broadcasting, general administration, forests and environment, and education allocated less than one per cent of their budgetary allocation under the “minor” head.
However, the woman and child development put a whopping Rs 1,474.13 crore, or 84.3 per cent of its budgeted amount under this vague head. The industries and mines department put Rs 1,370.91 crore or 45.7 per cent of its budgetary allocation under it. The energy and petrochemicals put Rs 2,627.45 crore or 41 per cent of the budgetary allocation under the amorphous minor head. The ports and transport department put 657.32 crore (or 41.8 per cent) of its budgetary allocation under the minor head. The agriculture department put Rs 1,187.65 crore under the minor head. And, the panchayats department put Rs 1,590.53 crore, or 14.1 per cent, under the minor head.
*Director, Pathey Budget Centre, Ahmedabad