CHAPTER TREND AND GROWTH OF STATE EXPENDITURE OF...

CHAPTER I11

TREND AND GROWTH OF STATE EXPENDITURE

OF INDIAN STATES

The public sector has been assigned a key role in

the economic development of underdeveloped countries and

hence there has been a rapid expansion of the publlc sector 1

in a developing economy like India. As Flicks aptly

points out, "The rapid expansion of public sector is now a

universal phenomenon. " Adolf wagner2 has established a

functional relationship between industrialisation and the

relative importance of public sector activities. According

to Wagner's law, the expansion of public expenditure is in

proportion to the growth of the Gross National Product.

According to Wagner, an increase in state activity is

accompanied by an increase in government expenditure as a

proportion of National Income. This is due to the fact

that the government has to perform a number of functions

more efficiently, which has led to an intensive growth in

public activity thereby increasing government expenditure.

According to Peacock and Wiseman, public

expenditure grows over time, not at a constant rate, but on

an ascending spiral. Social emergencies like war and

depression require a sizeable increase in their relative 3

share of public expenditure. Peacock and Wiseman relate

the growth of public expenditure to external forces like war

and displacement effect.

"One of the characteristics of economic

development and the course of industrialisation is the urban

movement and with it disappears the informal security of the

family and village. Urban population must be supplied with

formal social security, unemployment insurance and formal

community protection to replace the family and village

functions. This would support the hypothesis of an

increasing government' share In national inc~me."~ Thus

industrialisation, urbanisation and economic development

necessitate the rapid growth of public expenditure in an

economy. In addition, the expansion of the public sector

may also be owing to the growth of population, rise in

prices and economic growth.

Against this background, an attempt has been made

in this chapter to trace the growth of expenditure of twenty

two Indian states in nominal and real terms. Further,

p3pulation is considered as a permanent factor influencing

the growth of expenditure, as the rise in population leads

to a rapid rise in the demand for governmental services. A

given level of services may no longer be sufficient for an

increased level of population.

The. State D,omestic Product is also equally

important in influencing the growth of state government's

expenditure. As the level of State Domesti-c Product rises,

the proportion of different governmental services like

education, health, and transport to the State Domestic

Product will also grow. Therefore, in this chapter, an

analysis has also been made in terms of expenditure per head

of population and expenditure as percentage of the State

Domestic Product for 1969-70, 1980-81 and 1988-89.

The growth of expenditure may also be owing to

rise in prices. In order to eliminate the effect of price

change^,^ the growth of states' expend~ture in real terms is also examined. Thus, this chapter elucidates the trend and

pattern of states' expenditure in aggregate terms, the ratio

of expenditure to the State Domestic Product, and the

expenditure per head, both in nominal and real terms, during

1969-70 to 1988-89.

In order to analyse the trend, pattern and growth

of states' expenditure, public expenditure has been divided

into two main categories. They are Capital and Revenue

expenditure. It is also classified as development and non-

development expenditure. Development capital expenditure is

again divided into expenditure on Agriculture, Industries

and Public Health. Similarly, revenue expenditure is

divided into development and non-development revenue

expenditure. Development revenue expenditure comprises

expenditure on education, public health,-agriculture and

industry. Under non-development revenue expenditure,

expenditure on administrative services is also considered.

The following chart gives a clear picture of the

classification of expenditure of state governments.

( CHART - I I STRUCTURE OF STATE GOVERNMENT'S EXPENDITURE

I I

CAPITAL EXPENDITURE

I- I

I REVENUE EXPENDITURE

I-- I DEVELOPMENT NON-DE~~EIQPMENT DEVELOPMENT NOS-DEV~LOPMENT EXPENYITURE EXPENDITURE EXP~NOI'I'L'Hb EXPEYDITURI:

I

AGR~CULTUHE INDUSTRY PUBLIC HEALTH

1-'-1 I PUBLIC EDUCATION AGRICULTURE INDUSTRY 1 HEALTH

3.2 CAPITAL EXPENDITURE

I ADMINISTRATIVE SERVICES

Capital expenditure depends on various

imponderables like the floating of debt in the open market,

mobilisation of small savings, availability of credit, flow

71mE 3.11 U P l T M EXPUDITURE DF I lOIW STATES WIllN6 1969-70, 19W-81 AND 198D-89

(Rs. i n Lakhrl

Verr 81. Strtmr ........................................................ lo. 1969-70 1980-81 1988-89

1 Andhrr Praderh

2 A r r r r

3 l i h r r

4 Guj r ra t

5 Hrryma

6 H l r r c h r l Praderh

7 Jrrmu & K a r h i r

8 Krrnr t rka

9 X e r r l r

10 Iladhya Prrdesh

I1 Naharrshtrr

I1 Nmipur

13 h q h a l y a

I4 I l apr lmd

I5 O r i r s r

I6 Punjab

17 RrJrs thrn

18 Gikk i8

I9 T a 8 i l l r d u

20 T r l p u r r

21 U t t r r Praderh

22 Yer t B8no.l

of grants-in-aid, loans and advances from the Government of

India.

Table 3.1 indicates the broad &ends in capital

expenditure of the Indian states and its percentage share in

State Domestic Product at factor cost. The overall states'

expenditure has increased from Ks. 51,131 lakhs in 1969-70

to Rs. 7,28,428 lakhs in 1988-89, showing an increase of

fourteen times. Maharashtra shows the highest capital

expenditure of Rs. 8,789 lakhs in 1969-70, which has

increased to Rs. 34,258 lakhs in 1980-81, further went up to

Rs. 86,390 lakhs in 1988-89. Haryana shows the lowest

capital expenditure in 1969-70 and 1988-89 while in 1980-81,

Assam shows the lowest capital expenditure. The special

category states6 indicate a lower amount of capital

expenditure than the other states.

But the percentage share of capital expenditure in

the State Domestic Product of Indian states is higher in the

case of Special Category States ranging from 14.5 per cent

(Tripura) to 33.5 per cent (Sikkim) in 1988-89. Among the

other states, the overall percentage share of capital

expenditure in the State Domestic Product ranges from 1.1

per cent to 4.7 per cent in 1988-89, because the capital

expenditure is financed by central government resources

other than the resources of the state government. The

60 TALE 3.21 ~ I H F w 1 1 n EP~OINE m IEM F WIU srhm E~RIP isbv-n, I- l l ~ I-

(in rwnl

j lPb?-70 I 1m-m l9m-m 01. Strk ,-I YP. IRr @ b I At Dvmt R h I At lbntmt Rica I At h t k i a I At h t m t R h

I (In Ll : I 9u cwitr 1nhx OfI 9u CIpitr lnhx Of : FN Wltr I*: Of I 9u Wltr 1-x ol : Iln Ll Emth j lh Ll Emth I [ in hl Bmd : lln Ll Bmth

0-0 a -

percentage share of capital expenditure in the State

Domestic Product is the highest in Karnataka, Madhya

Pradesh, and Kerala in 1969-70, 198&81 and 1988-89

respectively. The lowest share of capital expenditure in

the State Domestic Product is shown by Tamil Nadu in all the

years selected.

Table 3.2 depicts the growth of capital

expenditure per head of Indian states during 1969-70, 1980-

81, and 1988-89. In 1969-70, at constant prices, states

such as Andhra Pradesh, Assam, Gujarat, Jammu and Kashmir,

Karnataka, Maharashtra, Nagaland, Orissa, and Hajasthan were

higher than all states per capita expenditure of Rs. 9.30.

But in 1980-81, Gujarat, Haryana, Himachal Pradesh, Jammu

and Kashmir, Kerala, Madhya Pradesh, Mahnrashtra, Manipur,

Meghalaya, Nagaland, Orissa, Rajasthan, Sikkim and Tripura,

were above all states per capita expenditure of Rs. 17.30.

The states such as Assam, Gujarat, Himachal Pradesh, Jammu

and Kashmir, Madhya Pradesh, Maharashtra, Manipur,

Meghalaya, Nagaland, Orissa, Punjab, RajaSthan, Sikkim and

Tripura were above all states per capita expenditure of Rs.

20.60 in 1988-89. All States average index of growth of

expenditure in nominal terms has increased from 502 per cent

to 1,019 per cent while in real terms it has increased from

186 per cent to 221 per cent during 1980-81 to 1988-89.

Gujarat, Haryana, Kerala, Madhya Pradesh, Orissa, Punjab,

Tamil Nadu, and Uttar Pradesh show a higher index of growth

than the all states' average index of 186 and 221 in 1980-81

and 1988-89 respectively.

3.3 CAPITAL DEVELOPYENT EXPENDITURE

Capital development expenditure consists of items

such as education, public health, agriculture, industries

and miscellaneous items which are productive in nature.

Table 3.3 indicates the trend in capital development

expenditure of Indian states and its percentage share in the

State Domestic Product. There is a rising trend in the

aggregate capital development expenditure which has

increased from Rs. 50,050 lakhs in 1969-70 to Rs. 7,03,451

lakhs in 1988-89 showing nearly an increase of fourteen

times. The highest expenditure is shown by Maharashtra,

i.e., Rs. 6,766 lakhs in 1969-70, Rs. 47,079 lakhs by Uttar

Pradesh in 1980-81, and again by Mal~arashtra with Hs. 84,202

lakhs in 1988-89. The lowest capital development

expenditure among the special category states is shown by

Nagaland in 1969-70 and Sikkim in 1980-81 and 1988-89. The

percentage share of this item of expenditure in the State

Domestic Product is higher in the case of Special Category

States ranging from 14.1 (Tripura) to 31.9 (Sikkim) in 1988-

89. Among the other states, Assam and Orissa have recorded

the highest share in the State Domestic Product, i.e., 2.2

1Rup.m~ i n Lakhs)

Verr 81. Btatms Yo. 1969-70 1780-81 1989-89

1 bndhrr Pradmsh 4,152 (1.7111 24,523 13.4111 46,106 (2.9111 ( 90.511 (98.811 -. 196.711

2 Assan 6 4 2 . 2 1 7,428 i3.05111 16,267 10.4111 I 96.011 I98.311 (96.011

3 Dihar 4 7 2 . 1 1 1 1 25,648 I 3 . 9 ) I I 62,490 (3.8111 ( 95.811 (99.611 (90.011

4 Bu la r r t 3,396 (1.6111 19,708 13.0111 41,568 (2.7111 1112.711 197.251 199.3\1

I k r y a n a 730 (0.9111 9,997 13.3111 1i,856' (1.9111 l145.311 (97.811 (97.011

6 Himachrl Pradmsh 5,056 17.6111 10,688 (6.1111 196.11 I 195.711

7 Jammu I Kwhmir 5 4 7 . 5 1 12,064 (13.8111 35,228 (19.1111 ( 63.111 (97.111 (98.611

8 Karnataka 6,171 17.5111 16,271 12.4111 33,937 ( 2 . b l I I (106.511 (94.811 (96.311

9 Kerala 7 7 1 . 4 1 1 1 , 8 1 5 3 . 4 1 1 20,400 (2.7111 (111.8) I 0 7 . 0 1 1 191.1I I

10 Radhya Pradesh 2,763 (1.4111 25,857 (4.18111 62 ,460 14.0111 i100.511 (99.511 (91.011

I 1 Mahararhtra 6 7 6 6 1 . 7 1 1 3 , 0 4 9 (2.4111 84,202 (2.4181 (77.0 I 1 199.418 197.511

I 2 Ranipur 3,177 I l b . l I I 1 8,7bO 117.7111 (97.01 I (93.911

13 Ileghalya 2,036 (13.8111 6,339 116.3111 (96.5) I (92.0):

14 Yagaland 525 i21.8111 2,477 123.6111 7,111 120.8) I I (95.5 11 196.411 193.011

17 Rrjasthsn

I B Bitkim

19 Tamil Madu

20 Tripura

21 U t t a r Prrdlsh 4,722 11.2111 47,079 13.3111 77,643 (1.5188 (120.911 197.811 (97.811

22 k s t L n o a l - 2.BO 10.711: 10,208 (1.1111 23,328 ( 1 . 2 ) I I

A l l Btatms 30,050 3,12,870 7,0S,451

h r c m t Rmsmrw Bank at Ind ia Bul lmtin, 1969-70-19BB-89 h t m I O 8hw th. p r c m t r g . of Cap i ta l i tevelopent Erpmditurm i n Stat.

D m m t I c PrO*Kt. : Oho* th. pwemtagm of Cap l ta l Dmwlnpmmnt Expmdl tu re I n To ta l

C q l t a l E q n d l t u n

: 1w-m I Imc-oI ;-I

1- 81. 6 t h lb. :hr u p i b I M k t Rlm I M Cprntmt Rks : Y Pvmt Rlm I lt Pmtmt Rlm

I lin Ibl : L Pa capita lrdn ot: Pa capita lndn ot I Rr u p i b lrdn ot I Pa upita lnOlx ot j lin lbl earth j (in Ibl BrorUl I (in b! BlPlUl I (in bl earth

0-1 I

19 lull m 3.9 17.6 m 6.3 110 s.8 no 7.3 IZ

per cent in 1969-70, Orissa with 5.9 per cent and 7.5 per

cent in 1980-81 and 1988-89 respectively. The lowest

percentage share in the State Domestic Product is shown by

West Bengal both in 1969-70 and 1980-81, and by Tamil Nadu

in 1988-89.

Table 3.4 presents the growth of per capita

capital development expenditure of Indian states during

1969-70, 1980-81 and 1988-89. Andhra Pradesh, Assam,

Gujarat, Himachal Pradesh, Jammu and Kashmir, Karnataka,

Maharashtra, Nagaland, Orissa, and Rajasthan show a higher

capital development expenditure than all states' per capita

Of Rs.9.10 in 1969-70. But in 1980-81, Andhra Pradesh,

Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir,

Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya,

Nagaland, Orissa, Rajasthan, Sikkim and Tripura show a

higher per capita capital development expenditure than the

all States' per capita of Rs. 16.90. In 1988-89, Assam,

Gujarat, Himachal Pradesh, Jammu and kashmir, Madhya

Pradesh, Maharashtra, Manipur, Meghalaya, Nagaland, Orissa,

Punjab, Rajasthan, Sikkim and Tripura show higher than all

States per capita expenditure of Rs. 19.93. Further,

Haryana, Kerala, Madhya Pradesh, Orissa, Punjab and Uttar

Pradesh have shown a higher index of growth than the all

states' average index of 185 per cent in 1980-81, and

Haryana, Jammu and Kashmir, Madhya Pradesh, Orissa, Punjab

and Uttar Pradesh show above all States average index of 219

in 1988-89. The all-state average index of growth in

nominal terms has increased from 501 per ceiit in 1980-81 to

1,007 per cent in 1988-89, while in constant terms it has

increased from 185 per cent in 1980-81 to 219 per cent in

1988-89.

3.4 CAPITAL EXPENDITURE ON AGRICULTURE

Agricultural expenditure on capital account

includes water and power development, and other allied

services. The higher priority given to agriculture in the

five-year plans and the transformation of traditional

agriculture into modern agriculture have resulted in vast

changes in the expenditure on agriculture. Table 3.5

represents the capital expenditure on agriculture of Indian

states and its percentage share In the State Domestic

Product at factor cost and the percentage share in the total

capital expenditure. The overall states' aggregate

expenditure on agriculture was negative with Its. 52 lnkhs in

1969-70 and rose to Rs. 45,588 lakhs in 1988-89, owing to

the creation of infrastructure in agriculture and allied

services. The highest capital expenditure on agriculture is

incurred by Bihar (Rs. 334 lakhs in 1969-70), Uttar Pradesh

(Rs. 9,699 lakhs in 1980-81) and Maharashtra (Rs. 9,397

lakhs in 1988-89). The lowest expenditure is incurred by

67 TLslE 3.51 W I T P EXPENDITURE O* MRICUTURE ff I W I U 81hTES W R I M 1769-10, IPm-PI

#I0 178s-09 (Rupees i n Laths1

Year 01. 8t.t.S ................................................... Yo. 1969-70 1980-81 1980-09

1 h d h r a Pradesh 24 10.0)I I 1,474 (0.2)I I 1,424 (0.08111 ( 0.518 1 6.011 - ( 3.011

2 Assam 1632 (0.7188 648 (0.10111

3 BLhar 334 10.1111 5,322 (0.8)I I 4,548 10.3111 ( 6.818 (20.711 ( 7.118

4 Bularat 5 (0.0111 364 (0.03):: 4,445 (0.3111 ( 0.211 1 1.811 (10.611

3 Uaryanr 20 10.02)11 - 490 10.15)11 1,301 10.2)II 1 3.418 I 4.011 I 9.811

6 Hinachal Pradesh 607 (0 .9 ) I I 655 (0.4111 (11.511 1 3.911

7 Jansu L K a r b i r - (0.0710 2,467 (2.8111 2,222 11.2)11 8 (19.811 ( 6.211

8 Karnrtrka - (0.0111 1,660 (0.3111 560 (0.04118 I ( 9.711 ( 1.611

9 Kerala 9 (0.06111 963 (0.3):: 1,466 (0.2):: 1 0.6): ( 7.9): ( 7.011

10 lladhva Pradesh 180 10.04)II 7 4 1.14111 3.191 10.2)tI

15 Orirsa

16 Punjab

17 Rajasthm

18 S ikk ie

19 Tani l Nadu

20 Tr ipura

21 Ut ta r Pradesh

22 Yest h n q a l

611 stat..

k r c e l h s e r v e k n k of Ind ia Bu l le t in , 1969-70 to 1986-89 hta I I1 Bha tin percentage of Capi ta l Expmditure on. I )pr lcul tum i n

l t a t a Damstic h d u c t . 8 IhR1 tk. percentage of Capi ta l E x p a d l t u r e on h g r i c u l t u r e i n

l e t r l C a p l t r l Expmditure

68 TW 3.b: BIW IF WIT# UPDDIW m ~ I M W m I ~ W IF IBIW SIATES IU~IS IWN, IM m I-

lln mwml

I l W N : I M I _ _ (

Isages 61. 9bta 10. :Far @b I At hrmt Ricn I At lm l tn t Rlnr I At U m t Prlnr I At Cmstnt Rita

I lln Ibl I I : Far capih lndn o i l hr ciplb lndrx d I Rr c@b lndn of I Rr @b Ir&z ot

I lin Ibl %arm I lin Rrl h t h j lin ihl h t h l lin Rrl h t h I 0 , -

Gujarat with Rs.4 lakhs and again Gujarat Rs.364 lakhs and

Karnataka Rs.560 lakhs in 1969-70, 1980-81 and 1988-89

respectively. Among the special categwy states, the

highest expenditure is incurred by Jammu & Kashmir Rs.2,467

in 1980-81 and Rs.2,222 in 1988-89. The lowest expenditure

is incurred by Meghalaya Rs.2 lakhs and 114 lakhs in 1980-81

and 1988-89 respectively. The ratio of capital expenditure

on agriculture to the State Domestic Product is very small

in the case of all states, i.e., ranging from 0.04 per cent

(Karnataka) to 1.2 per cent (Manipur and Sikkim) in 1988-89.

Table 3.6 presents growth of capital expenditure

per head on agriculture of Indian states during 1969-70,

1980-81 and 1988-89 at current and constant prices. At

constant prices, Bihar, Haryana, Jammu and Kashmir, Madhya

Pradesh, Maharashtra, Orissa, Rajasthan, and West Bengal

were above all States' per capita of Rs. 0.09 in 1969-70

while Assam, Bihar, Himachal Pradesh, Jammu and Kashmir,

Madhya Pradesh, Maharashtra, Manipur, Nagaland, Orissa,

Sikkim, Tripura and Uttar Pradesh were above all States per

capita of Rs. 2.40 in 1980-81; Gujarat, Haryana, Himachal

Pradesh, Jammu and Kashmir, Maharashtra, Manipur. Meghalaya,

Nagaland, Punjab, Sikkim and Tripura were above all States

per cdpita of Rs. 1.29 in 1988-89. In addition, the per

capita capital expenditure on agriculture on all Indian

states shows a decliiiing trend, i.e., from Rs. 2.4 to

Rs.1.29 during 1980-81 to 1988-89. At current prices, the

index of growth was 7,266 per cent in 1980-81 and declined

to 661 per cent in 1988-89 and at consta& terms, it was

2,666 per cent in 1980-81 and 1,433 per cent in 1988-89.

3.5 CAPITAL EXPENDITURE ON INDUSTRIES

The significance of industrialisation in the

process of economic development has been realised in India

and consequently the expenditure on industries has increased

considerably. The rapid expansion of the public sector and

significant progress in the field of science and technology

have resulted in enormous expenditure on industries in the

Indian states. But the concentration of industrial

development leads to regional imbalances, where this

expenditure is higher only in a few states.

Table 3.7 shows the capital expenditure on

industries and its share in the State Domestic Product and

the total capital expenditure during the years 1969-70,

1980-81 and 1988-89. The expenditure of all tho States has

increased nearly eight times, i. e., from Rs. 6,710 lakhs in

1969-70 to Rs. 46,618 lakhs in 1988-89. The highest

expenditure is recorded by Uttar Pradesh - Hs.915 lakhs in 1969-70, Rs.2,677 lakhs in 1980-81, and Rs. 11,007 lakhs in

1988-89. The lowest expenditure is incurred by the special

i l u p a r I n Lakhsl

Vrar 91. Btates #a. 1969-70 1980-81 1988-89

1 Andhra Pradrsh 784 i0.3111 1,452 10.3111 4,U5 (0.3111 i17.111 i 5.918 -r i 9.111

2 Arram 232 10.3111 178 10.1111 3,202 (0.3111 (13.511 i 2.411 111.011

3 Bihar 180 (0.07111 606 (0.1111 2,663 (0.01111 ( 3.711 1 2.411 1 4.211

4 Bujarat 413 iO.2111 136 i0.01111 1,591 ~ 0 . 1 ~ 1 1 (13.711 1 0.711 ( 3.811

5 Haryma I50 10.2118 125 (0.03111 209 10.04111 i31.111 i 1.211 1 2.211

6 Himachal Praderh - 102 i0.14111 475 (0.3111

8 Karnataka 527- iO.03111 1 2 7 10.23111 1,904' IO.14111 ( 9.111 ( 7.411 ( 5.41:

9 Krrala IS5 (0.111: 1,452 iO.41111 1,835 iO.2111 ( 3.811 (11.911 I 8.818

10 Iladhvr Pradcrh 522 10.24l11 436 (0.06III 1.632 10.1111 .- .

11 Lhararht ra BPO (0.2111 . 791' IO.OSIII i , z 7 1 10.0b111 (10.1lI i 2.311 i 2.611

12 L n i o u r 94 10.5111 456 (0.9111

.- - . 20 Tripurs 92 i0.36111 252 (0.4111

( 3.511 1 3.011 21 Uttar Pradrsh 915 (0.2111 2,677 i0.2111 11,007 iO.2111

122.3l: 1 5.711 113.911 22 West Ikngal 169 (0.04111 670 (0.07111 2,710 10.12111

l b.318 I 6-31 1 (10.01 I

Al l S t a b s 6,710 12,348 46,618

h r c n l h r e r v r )mk of India Bulletin, 1969-70 to 1980-B9 btr I I8 8ha tk p r c a n b p . of Capital Erpndi tvr r a Induntr in i n State

h n t & trodltct. 8 Iko* tk rrcantage of Capital Eapnditure n Agriculture i n

TME S.81 m LF RR wnh wnn ~ W P I ~ ~ R E w ~ I E S IF IIOM SIAW URIS lwm, 1- m I- (in Ryrnl

I I w m I 1W-m 1- PI. Bbh 1-8

Ib. I k cwib I At Pmnt Rlca I At h t n t R h I ht lumnt Prlm I At &tat Rlcn I lln bl I

I Rr cwtr lrdn pl: k rrplta Indmx of I Rr rrplta In&" pl : Rr capltr lndlx pl

: lln bl h i t h j lin Ll Grmth l lln Ll &with I lin lbl h t h I t I -. :

category states Nagaland (Rs. 67 lakhs) in 1969-70 and

Sikkim (Rs.40 lakhs) in 1980-81, and again Sikkim (Hs. 141 - lakhs) in 1988-89. The percentage share of this item of

expenditure to the State Domestic Product is very low, below

1 per cent in all the states. Besides, it remained stable

during 1969-70 and 1988-89.

Table 3.8 presents the growth of per capita

capital expenditure on industries both at current and

constant prices of twenty two Indian states during 1069-70,

1980-81 and 1988-89. Andhra Pradesh, Assam, Gujarat,

Haryana, Jammu and Kashmir, Karnataka, Maharashtra,

Nagaland, Orissa and Punjab were above the all States per

capita capital expenditure on industries of Rs. 1.22 in

1969-70 while Andhra Pradesh, Himachal Pradesh, Jammu and

Kashmir, Karnataka, Kerala, Manipur, Meghalaya, Nagaland,

Orissa, Punjab, RajaSthan, Sikkim, Tripura and Uttar Pradesh

were above the all States' per capita expenditure of Rs.

0.68 in 1980-81; Andhra Pradesh, Assam, Himachal Pradesh,

Jammu and Kashmir, Kerala, Manipur Meghalaya, Nagaland,

Orissa, Punjab, Rajasthan, Sikkim, Tripura and Uttar Pradesh

were above all States' per capita expenditure of Rs. 1.30 in

1988-89. The growth index of expenditure on industries in

Bihar, Jammu and Kashmir, Karnataka, Kerala, Rajasthan,

Uttar Pradesh and West Bengal shows a higher index than that

of the all states average of 55 per cent, and Assam, Kerala,

Meghalaya, Orissa, ~a~asthan, Sikkim, Tripura, Uttar Pradesh

and West Bengal show a higher index of growth than the all

states average index of 106 in 1980-31 and 1988-89

respectively at constant prices. At current price, the

index of growth was 151 per cent and 490 per cent in 1980-81

and 1988-89 respectively.

3.6 CAPITAL EXPENDITURE ON PUBLIC HEALTH

Public Health expenditure is wealth-producing as

well as health-producing. Among social services, health

stands second to education in India. As a welfare State, the

state governments spend a large amount in the provision of

medical health services such as construction of hospitals,

promotion of medical education, establishment of primary

health centres and sub-centres in the villages, etc.

The continuous rise in expenditure on medical and

public health services of all the states in India can be

seen from the Table 3.9. There is not much growth in this

item of expenditure during 1969-70 and 1988-89. The

aggregate expenditure on health has increased from Rs.

21,766 lakhs in 1980-81 to Rs. 20,764 lakhs in 1988-89.

Rajasthan shows the highest expenditure of Rs. 3,466 lakhs

in 1980-81 and Uttar Pradesh Rs. 2,858 lakhs in 1988-89.

The expenditure has shown a decline in 1988-89 in almost

75

TAKE 3.91 WITAL EIPENDITW(E I R4LTH ff IWDIM STATES DW)IY6 1969-70, 1980-81 MD 1963-89

L R u ~ e s I n Lakhsl

Year 61. 8 ta te r ............................................................... lo. 1969-70 1980-81 1988-89

kndhra Pradash

Assaa

Dlhar

Bularat

Haryana

Hi.achal Pradesh

Jaaeu & Karhair

Krrnataka

Kerala

Hadhya Praderh

13 L g h r l y a

14 Yaqr lmd

15 Orisra

I b Punlab

17 Ra ja r thm

18 Slkki.

19 l a a l l Nadu . .

20 Tr ipura 245 10.9111 100 L0.2111 ( 9.311 ( 1.311

21 U t t a r Pradash 789 i0.05111 2 , 8 1 i0.05111 1 1.611 I 3.611

22 Mast Banpal 645 ( 0 . l l l I I 1,587 (0.07111 1 6.011 1 5.91 I

A11 8 t a t n 21,766 20,764

B o l l r n r L u r v a Dank ~f Ind ia Bu l le t in , 1PbP-70 to I?@-89. b t a I I 1 skpl tk p n r c n t r g o of Capital E x p m d l t u n m l n d u r t r l n in State

h s t l c P r d u c t . I Ika th p r c m t a g o of l h p i t a l Erpnndl ture on Agricul turm I n

rota1 c . ~ i t r l Exe# l i tun

IlWrn I 1W-u 19m-m B. s t a t 6 1-1

h. IR caplta I Y brmt R i c n : :It Cmstmt R i r a I At brmt R u m I M Cmstmt Ricn I lln bl I

I Pa c w t a lndrx of: Pa u p i t . 1tdwd.x of : R capita lnbr of : R u p i t a l n h x of :Ilnbl 8mth I l i n b l bpUl I l i nb l - 8mth : l i n b ) 8mth

(-0 , 1

I M h r r Pr* - 2.0 0.7 0.5 W 0.1 I 4

2 km - 2.0 0.7 7.0 M) 1.5 214

S B i k - 4.5 1.7 2.2 10 0.3 21

4 W u r t - 4.1 1.5 0.3 10 0.1 6

3 wm - 2.2 0.8 2.9 130 0.6 75

6 Whl R M - 27.8 10.3 5.1 ?O 1.1 10

1 J u L X I l h i r - 91.4 14.6 8.9 ?O I.? 13

8 KwMU - 0.2 0.07 3.4 170 0.7 1WO

9 W a l l - 6.8 2.5 b.5 W 1.4 !4

10 *a R M - 0.5 0.8 2.5 D 0.5 Al

11 I lrhrashtrr - 1.4 0.5 2.8 200 0.6 M

12 nmip~r - M-7 20.3 8.9 20 1,s 9

I S kphrlyl - 6.3 24.5 14.2 20 3.1 12

I4 h l m d - 65.3 24.2 $4.1 YI 7.4 50

15 bllv - 1.4 0.5 0.5 4b 0.1 ?O

lb hiah - 2.6 0.7 4.1 IbO 0.9 100

I1 birth - 10.1 3.7 1.1 10 0.2 5

18 Bikth - 28.1 10.4 18.2 M 4.0 JB

19 T r i l kdu - 1.2 0.4 2.8 250 0.6 II

10 Tr ipar - 11.9 4.4 4.4 4b 0.9 225

21 Utbkdah - 0.7 0.3 2.2 310 0.5 16b

n kt- - 1.9 0.4 2.5 210 0.1 m

411 Sbta 3.17 1.17 2.93 IS 0.6 3l

hmm u # MI, ~ l l t l n , 1~9-70 to l9m-m.

fourteen of the states. The lowest expenditure is shown by.

Sikkim Rs.89 lakhs in 1980-81 and Rs.73 lakhs in 1888-89.

The percentage share of this expenditus in the State

Domestic Product of all the states is very low, below 1 per

cent in 1988-89.

Table 3.10 presents the growth of expenditure on

health per head of Indian states during 1980-81 and 1988-89

both at current and constant prices. Per capita expenditure

on health of Bihar, Gujarat, Ilimachal Pradesh, Jammu and

Kashmir, Kerala, Manlpur, Meghalaya, Nagaland, RajaSthan,

Sikkim and Tripura was higher than the all states per capita

of Rs.1.17 in 1980-81, and Assam, Himachal Pradesh, Jammu

and Kashmir, Karnataka, Kerala, Maharashtra, Manipur,

Meghalaya, ~a~aiand, Punjab, Sikkim, Tamil Nadu, Tripura

showed a higher expenditure than the all states average per

capita expenditure of Rs. 0.60 in 1988-89 at constant

prices. Assam, Haryana, Karnataka, Kerala, Madhya Pradesh,

Maharashtra, Punjab, Tamil Nadu, Tripura, Uttar Pradesh and

West Bengal showed per capita expenditure on health higher

than the all states average index of 51 in 1988-89.

3.7 NON-DEVELD- CAPITAL EXPEXDITURE

The rise in non-development services is mainly due

to population growth and the emergence of planning, which

78

TABLE 3.11: NiiI-DEVELOFiENT UPITPL E?PEWDITLRE OF INDINI nATE6 MI18 1969-70, 1980-81 awe l9ea-BP

I R u p r r i n Laths)

Ymar 81. Stater Yo. 1969-70 1980-81 1988-W

1 Lndhra Pradesh 436 10.17111 279 (0.03):: 1,564 iO.09)II ( 9.511 1 1.1): ( 3.318

2 A r r u (B i0.07111 122 i0.04111 869 10.1111 1 4.0)I ( 1.611 i 3.2):

3 Bihar 209 (0.07)I I 94 i0.03111 1,237 (0.07):: 1 4.211 1 0.411 I 1.911

4 6ularat -382 -(0.16)11 556 (0.08111 311 (0.01111 (13.011 ( 2.7): ( 0.71t

5 Haryana -213 -~O.Zb I I I 229 (0.07)I I 402 (0.05111 (42.011 1 2.211 1 3.011

6 Hiaachal Pradrsh - 203 (0.3):: 176 10.3)II ( 3.911 1 4.311

7 Jammu 4 Kashnir 1,083 14.3):: 365 10.41111 531 10.3)11 (36.911 1 2.9): ( 1.5):

8 Karmataka -374 - 10.2111 897 (0.16)I I 1,303 (0.1)I I ( 6.511 ( 5.211 ( 3.711

9 Kerala -181 -iO.13111 371 (O. l I I1 495 10.1111 (11.81t ( 3.011 2.411

10 llrdhya Pradrch -13 -i0.00111 118 (0.01)I I 6,107 (0.4114 1 0.511 1 0.511 ( 8.911

I f Iaharashtra 2023 10.12111 809 (0.05111 2,186 10.1111 (23.0): ( 2.411 i 2.511

12 Ian ipur 100 10.5)II 569 12.9111 I S.111 L 6.O)I

13 k g h a l y r 74 i0.5111 553 (1.4111 ( 3.511 1 8.011

I 4 Nagaland 23 (1.0181 q3 (0.88111 389 (1.1)I: 1 4.5)) i 3.611 ( 5.111

I S Orisra 32 IO.OZlI1 294 iO.09)I l 1,231 10.2)11 I i Q 5 I 1 ( 1.611 I 2.511

16 Punjab - 6 ( 0 . 0 ) I I 246 (0.01111 715 (0.1)11 I-1.0): ( 3.211 ( 2.711

17 RaJarthrn -136 -(0.07)11 337 (0.01)I I 657 10.1)11 (-4.01 ( 1.911 1 1.711

18 S i k t i r b9 (2.67)II 206 11.7)II ( 5.711 I 4.511

I 9 Tamil Yadu -999 IO.4111 318 (0.04)I I 1,552 iO . l I I1 (-71.61) 1 3.7): i 7.811

20 Tr ipura 61 10.24)11 218 10.4)It ( 2.311 ( 2.6):

21 U t t a r Pradrrh -852 (0.18l I I 1,054 10.07)tI 1,748 (0.03181 (-20.91) 1 2.211 1 2.711

22 Yust Bmqa l 382 (0.11l11 461 10.04)II 1,522 10.071tI 114.3)I 1 4.311 ( 5.6):

I)11 States 1,100 7,lSZ 24,843

Sourer: b s r r r r L n k o f Ind ia B u l l r t i n , 1969-70-I988-BP lot8 11: Shall tk p r c r n t a g r a t n m - d 8 v 8 l o p m t capital e x p m d i t u r r i n 6 t r t r

k w s t l c rrduct. I M tk w r c m t a g r of n o n - d 8 v ~ l o p r n t c a p i t a l r r p n d i t u r s i n Total

Cap i ta l E:#ndIturr.

79

IYL 3.121 m F mwmman WIIN UPBOITUE RR EW ff tmtw S T A ~ ILRUG Iwm, ~ s s ~ YO I- Iln Rpnl

: 1 9 ~ m I IsBS%L IW-8 51. Bbtn b. Ihr wlb I At D r m t P r h I Ilt Lnslnt Prlcn : Lt Ovmt Rim : A t Lnstat Prim

I lln kl I I Plr cqih Ir&r all R cqlb Indm of I hr upib lndn of I R cqdb lndtr of I l i n kl Bmth I [in FsI h t h I lin Rrl Bmth I lin lbl %aN,

lead to the rise of non-developmental expenditure such as

general administration, police, ~ustice, jails and convict

settlements. The non-developmental expendichre is grouped

under 1) administrative services, ii) cost of collection of

taxes, iii) debt servicing, iv) famine relief, and

v) others.

The non-developmental outlay on capital account

and its percentage share in the State Domestic Product and

in the total capital expenditure is represented in Table

3.11. The aggregate non-developmental outlay of all the

Indian States has increased 23 times, i.e., from Rs.1,100

lakhs in 1969-70 to Rs.24,843 lakhs in 1988-89. Maharashtra

incurred the highest expenditure of Rs.2,023 lakhs in 1969-

70, Uttar pradesh Rs.1,054 in 1980-81, and Madhya Pradesh

Rs. 6,107 in 1988-89. The lowest expenditure incurred by

Tamil Nadu was Rs.999 lakhs in 1969-70, Tripura Rs.61 lakhs

in 1980-81, and Sikkim Rs.206 lakhs In 1988-89. The

percentage share of this expenditure in the State Domestic

Product of all states is very low, below 2.9 per cent in

1988-89.

Table 3.12 shows the growth of non-developmental

capital expenditure per head of Indian states during

1969-70, 1980-81 and 1988-89 at current and constant prices.

Andhra Pradesh, Jammu and Kashmir, Maharashtra and Nagaland

showed higher per capita non-development cnpital expenditure

than the all states average of Rs. 0.19 at constant prices, -

and Karnataka, Gujarat, Haryana, Kerala, fiadhya Pradesh,

Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh showed a

negative expenditure in 1969-70. In 1980-81, Gujarat,

Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka,

Kerala, Maharashtra, Manipur, Meghalaya, Nagaland, Orissa,

Punjab, Rajasthan, Sikkim and Tripura showed higher per

capita non-development expenditure than the all states

average of Rs. 0.38 at constant prices. In 1988-89, Assam,

Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala,

Maharashtra, Manipur, Meghalaya, Nagaland, Orissa, Punjab,

Rajasthan, Sikkim and Tripura showed a higher than all

States per capita expenditure of Rs. 0.67 at constant

prices. Further, Madhya Pradesh, Meghalaya, Orissa and

Punjab showed a higher index of growth than the all States

average index of 352 in 1988-89 at constant prices. The

index of growth increased from 547 per cent in 1980-81 to

1,636 per cent in 1988-89 at current prices, while it went

up from 200 per cent in 1980-81 to 352 per cent in 1988-89

in constant terms.

3.8 REVF,NUE EXPENDITURE

Revenue expenditure has a dominant role in the

Structure of expenditure of the state governments due to the

Year 61. states ------------------------------------------------------- Yo. 1969-70 1980-81 1988-09

I Andhra Praderh

2 Assre

3 Uihar

4 Eu ja r r t

5 Haryma

6 Himachrl Pradesh

7 Jranu t K r s M i r

8 Karnatrkr

9 Kerala

10 I l~dhya Prrdesh

11 Rrhrrarhtra

12 Manipur

13 llcphrlya

14 Nrprland

I 5 Orlsra

16 Punjab

17 Rajasthan

18 Sikkim

19 Tamil Yadu

20 Tr ipu r r

21 U t ta r Pradesh

22 Hest Urnpa1

A l l 8tat.s 3,10,18 14,80,781 40,%,003

b u r c e l Reserve Bmk of Ind la Bu l le t in , 19b9-70 to 1980-09 Rate I 8 Bko* tk percentaqe of Revenue Expenditure I n Str tm

*tlC Prodwt.

I l w m I 1w-U ; _ _ I

1W-W 8. 0 tata Ib. :hr c@tr I M Prmt Rim l At Cmht R u n l kt Dvnnt P r i m I M h t m t R i c n

I l in Rrl : : Rr capita lnda of: hr capita lndsr of I hr o p i b Indrx of : Rr raplta b x of I l in lbl PlDlth I l ln lbl hth : ( in fml 6 m M : I ln fml 6mL

8-0 I -.

increase in programmes of social and economic development.

Revenue expenditure comprises development expenditure which

further consists of expenditure on heal*, education,

agriculture, and industry. Non-development expenditure

which comprises administrative services is also included

under revenue expenditure. This item of expenditure has

been represented by Table 3.13. The aggregate expenditure

of all the states was Rs. 3,10,138 lakhs in 1969-70, which

increased to Rs. 14,80,780 lakhs in 1980-81, and further to

Rs. 48,56,003 in 1988-89. During 1969-70 and 1988-89, the

increment of this expenditure was 17 times. The highest

revenue expenditure was incurred by Maharashtra in all the

three periods Rs. 37,548 lakhs, Rs. 1,91,704 lakhs and Us.

6,23,977 lakhs respectively. During the same year the

lowest revenue expenditure was incurred by Nagaland (Rs.

2,002 lakhs), Sikkim (Rs. 2,982 lakhs), and again by the

same state (Rs. 10,348 lakhs). The percentage of revenue

expenditure to the State Domestic Product expenditure is

also higher than all other items of expenditure. Among the

special category states, the highest per cent of 83.4 is

shown by Nagaland, 113.0 by Sikkim and 90 again by Nagaland

in all the three periods respectively. The percentage share

in other states ranged from 11.4 (Uttar Pradesh) to 26

(Andhra Pradesh) in 1988-89.

Table 3.14 shows the growth of per capita revenue

expenditure of Indian states during 1969-70, 1980-81 and

1988-89 at constant and current prices. Andhra Pradesh,

Assam, Gujarat, Haryana, Jammu and Kashmir, Karnataka,

Kerala, Maharashtra, Nagaland, Punjab, Rajasthan, Tamil Nadu

and West Bengal showed a higher per capita revenue

expenditure than the all states per capita revenue

expenditure of Rs. 56.59 in 1969-70; Andhra Pradesh,


Karnataka, Kerala, Maharashtra, Manipur, Meghalaya,

Nagaland, Punjab, Sikkim, Tamil Nadu and Tripura showed a

higher per capita revenue expenditure than the all states

average of Rs.80 in 1980-81; Andhra Pradesh, Gujarat,

Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka,

Kerala, Maharashtra, Manipur, Meghalaya, Nagaland, Punjab,

Sikkim and Tripura showed a higher per capita revenue

expenditure than ~s.145.20 in 1988-89. At current prices

the index of growth went up from 381 per cent in 1980-81 to

1,180 in 1988-89, while it went up from 141 per cent to 256

Per cent during the same period at constant prices.

3.9 REVENUE DEVELOPMENT EXPENDITURE

Revenue Development Expenditure comprises

expenditure on Social Services such as Education, Public

Health and other services and economic services like

86 InSLE S3.51 MVELDPllEWT REVENUE EIPENDITUN ff INDIAN SThlES DURIW 1969-70, 1900-81 WD

I9W-crr (Rupees I n L r k h r l

Verr 61. B t r t e s ................................................................ No. l9b9-70 1980-81 1988-89

5 Haryma 3,486 ( 4.0111 30,227 (IO.0111 95,788 111.2111 152.111 175.411 171.011

6 H i e r c h r l Prrdesh - 14,449 (21.8111 42,44b (26.0111

9 Ke ra l r 10,081 1 8.0111 50,454 4 S I l 1,25,723 ( I b . 5 I I I (68.711 175.511 lb4.711

10 Hadhyr Prrdesh 11,253 1 5.7111 75,334 (12.2111 2,24,542 (14 .5 I I l 1bO.BII 175.114 1bb.811

11 t laharrshtra 18,160 1 4.7111 1,27,787 19.11111 3,01,791 ~ l ~ . O l I I 148.311 l bb .6 l I Lbl.211

12 Hanipur 5,151 12b.2111 15,897 122.2111 173.011 168.511

21 U t t r r P r r d s l h 17,158 1 4.0111 1,19,882 18.5111 3,48,177 1 6.9111 (51.811 (69.811 (60.711

22 k s t k n o r l 4 4 1 4 b 78.355 1 8.7111 2,22,95b 110.4111

BOUrcel R e n r w Bank at I n d l r B u l l e t i n , 1969-70 t o 1960-89 Not@ I I1 8 h a the percentage of develop.ent revenue Expendi ture i n S ta te

' B o w t i c Product. I Ohmu t h e pa remtape of dsvs lopnent revenue Expendi ture i n To ta l

Rmvnw E a m d i t u r e

87 rm 3.161 emw s wc wra marpl~ raw mrm F m l m nnm URIK iw-m, i w am im-m

(in Wl

I wm-m I IW I-4

I W 81. 6btU #I. IRr capita I At hrrmt Ricn : 4t h t m t Mu I At k n n t Ricn I At h t n t R k n

I Iin Ibl I I Pu clplta lndn of! Rr clpita ln&x of I Rr uplta It&x of I Pu capita l&r d I (M ibl BmL I (in lhl h t h I [in Rl -. h t h I (in Rrl h t h

4-1

Agriculture and Industries. Table 3.15 illustrates the

trend in the revenue development expenditure of all the

Indian states and its percentage share in th? State Domestic

Product and in the total revenue expenditure. The aggregate

revenue development expenditure of all the states increased

from Rs. 1,62,970 lakhs in 1969-70 to Rs. 10,51,470 lakhs in

1980-81 and further to Rs.32,20,955 lakhs in 1988-89.

Maharashtra incurred the largest revenue development

expenditure of Rs. 18,160 lakhs, Rs. 1,27,787 lakhs and Rs.

3,81,791 lakhs in 1969-70, 1980-81 and 1988-89 respectively.

During the same period, the lowest revenue development

expenditure was incurred by Nagaland (Hs. 1,061 lakhs),

Sikkim (Rs. 2,477 lakhs), and again Sikkim (Rs. 8,321

lakhs). The percentage share of this item of expenditure in

the State Domestic Product is higher in the case of special

category states, which ranged from 60.9 per cent (Sikkim) to

22.2 per cent (Manipur) in 1988-89. Among the other states,

this percentage share in the SDP ranged from 6.9 per cent

(Uttar Pradesh) and 19.1 per cent (Andhra Pradesh) in

1988-89.

Table 3.16 depicts the growth of per capita

revenue development expenditure of Indian states during

1969-70, 1980-81, 1988-89, both at current and constant

prices. In real terms, Assam, Gujarat, Haryana, Jammu and

Kashmir, Karnataka, Kerala, Maharashtra, Punjab, Rajasthan,

Tamil Nadu and West Bengal showed a higher per capita

development revenue expenditure than the all states per

capita expenditure of Rs. 29.73 in 1969-70;-Andhra Pradesh,


Karnataka, Kerala, Maharashtra, Manipur, Meghalaya,

Nagaland, Punjab, Sikkim, Tamil Nadu, and Tripura showed a

higher per capita revenue development expenditure than the

all states per capita expenditure of Rs. 56.84 in 1980-81;

and Andhra Pradesh, Gujarat, Ilaryana, llimachal Pradesh,

Jammu and Kashmir, Karnataka, Maharashtra, Manipur,

Meghalaya, Nagaland, Punjab, Sikkim and Tripura showed a

higher per capita development revenue expenditure than the

all states average of Rs. 100.77 in 1988-89 at constant

prices. Further, the index of growth of per capita revenue

development expenditure ranged from 516 per cent to 1,559

per cent at current prices, whiie it went up from 191 per

cent to 338 per cent during the same period at constant

prices.

3.10 REVENUE EXPENDITURE ON EDUCATION

Education is a traditional and important function

of the government because of its social and private

benefits, and its contribution towards improving the quality

of labour force and productivity of the economy. The

expenditure on education in all the states increases at a

so TABLE 5.171 REVENUE EIPEYDllUlE CU EDUCATlOll DF IMDlM STAVES WRIYG 1969-70, 1980-81 Y(D

I9W-09

Year 81. States ................................................................ Yo. 1969-70 1980-81 1988-89

I Andhra Pradrsh 5,163 12.0111 23,026 13.1511L 80,496 0.0111 120.111 139.811 ' 111.411

.- -. 8 Karnataka 4,217 12.3111 17,204 13.2)II 61,808 (4.8111

123.411 119.211 119.911 9 Karalr 5,495 14.4111 21,325 (6.05111 54,773 17.2111

137.411 131.911 128.211 10 tlrdhyr Pradrsh 4,684 (2.3111 17,077 (7.8111 59,199 13.8111

(25.311 116.811 117.611 I 1 tlaharashtra 7,300 Il.9111 38,058 12.7111 1,08,166 (5.1111

(19.411 119.811 117.311 12 l l rn ipur 1,856 (9.4111 5,308 110.7111

126.311 122.911 Ilrphalya

Nagaland

Orissa

Punjab

Rajasthan

Sikki.

l a a i l l adu

Tr ipura

21 Ut ta r Pradesh 7,282 (1.7111 34,859' (2.5111 1,07,512 (2.1111 (22.011 (20.311 118.711

22 Yest Bengal 3,906 12.2111 24,540 12.7111 82,029 13.8111 122.411 122.01 I 124.71 I

A l l 8tat-s 68,040 3,11,756 9,73,388

Bourcnl Rmsarva Bank of Ind ia Bu l la t in , 1969-70-19BB-89 kt. I I: 8ha the percentage of ravmue Eapmdi t r ra m education i n Stat* Dommstlc

C r d r c t . I Bhon the percentage of revenue Expenditure m mducatlon I n Total hvenum

E x p m d l t u n

la 3 . ~ 1 mum F ~EWLE MDOINE m ~ C R I I U m HW w lmwn slam lsaem, 1w-u m I- lln bras1

1 1 w m 1 l9ab-W ;-,

1m-W 8. Gbtn Ir. IRr upib : M k m t Ricn I M Cumtmt Pricn : M k t Rim I M Emrtmt Ricn

I lln lbl I I Rr upib I*: 011 Rr CWitl Indtx Of I Rr twit1 I*, Of I Plr uplb Indt" of 1 lln lbl I lln h) 6rmith I lln bl -,, h t h 1 Iln hl h t h

I-3

rapid rate because of the following factors: i) faster rate

of growth of population, ii) income elasticity demand for - education, iii) education as an important'instrument of

achieving political, social, and occupational status and

modernisation. Hence, the expenditure of state governments

on primary and higher education has led to the vast increase

in this item of expenditure. The phenomenal growth of

expenditure on education and its percentage share in the

State Domestic Product and in the total revenue expenditure

are clearly shown in Tables 3.17 and 3.18. In Table 3.17,

the aggregate expenditure of all the states has moved from

Rs. 68,040 lakhs in 1969-70 to Rs. 3,11,756 lakhs in 1980-

81 and lts.9,73,388 laktls in 19118-89, an increase 01 nearly

18 times. The largest expenditure on education was

incurred by Maharashtra - Rs. 7,300 lakhs, Rs. 38,058 lakhs, and Rs. 1,08,166 lakhs during 1969-70, 1980-81 and 1988-89

respectively. The lowest expenditure was seen in Nagaland

Rs. 264 lakhs, Sikkim Rs. 310 lakhs and again Sikkim RS.

2,123 lakhs in 1969-70, 1980-81 and 1988-89 respectively.

The percentage share of revenue expenditure on education in

the State Domestic Product is the highest among the special

category states, in Sikkim (15.5 per cent) and the lowest in

Jammu & Kashmir (7.1 per cent). Among the other states, the

highest share is shown by Kerala (7.2 per cent) and the

lowest by Uttar Pradesh (2.1 per cent) in 1988-89.


education per head of Indian states during 1969-70, 1980-81

and 1988-89 both in nominal and real terms. '~ssam, Gujarat,

Haryana, Jammu and Kashmir, Karnataka, Kerala, Maharashtra,

Nagaland, Punjab, Rajasthan, Tamil Nadu and West Bengal

showed a higher expenditure on education per head than the

all states per capita of 11s. 12.41 in 1969-70; Assam,


Madhya Pradesh, Karnataka, Kerala, Maharashtra, Manipur,

Meghalaya, Nagaland, Punjab and Sikkim showed a higher

revenue expenditure per head than the all-states per capita

of Rs. 16.85 in 1980-81; and Gujarat, Haryana, Himachal

Pradesh, Jammu and Kashmir, Karnntaka, Manipur, Meghalaya,

Kerala, Maharashtra, Nagaland, Punjab, Sikkim, and Tripura

showed a higher revenue expenditure per head than the all-

states per capita of Rs. 30.27 in 1988-89 at constant

prices. The index of growth ranged from 366 to 1,122 per

cent, while it went up from 135 to 242 per cent at constant

prices during 1980-81 and 1988-89.

3.11 REVENUE EXPENDITURE ON PUBLIC HEALTH

In a Welfare State, it is the prime duty of the

government to provide adequate health facilities which are

preventive and curative in nature. Among the social

services, health stands second to education. In India,

Year 81, 8t1t.S no. 1969-70 1980-81 1988-89

Andhrr Prrderh

A5r.a

B ih r r

Gujarr t

Hrryrnr

Miwachai Pradrsh

Jraau I Karhair

K r rn r t rk r

K r r r l r

l lrdhyr Pradcrh

l l r h r r r r h t r r

l l rn ipur

tlaphrlyr

Naqrlrnd

O r i r r r

Punirb

Rrj1sth.n

Sikki.

Tamil Nrdu

Tr ipu r r

U t t r r Prrderh

Y r r t h n p r l

A l l S t r t r r 27,435 1,39,445 3,26,454

Bwrcn: Rasmrva Bank of Ind ia l u l l a t i n , 1969-70-1988-89 b t a i t t Bhor t b ~ p rc4n taqr of ravanun Expnd i tu rc oa publ ic M r l t h i n

Strtw b w r t i c Product. 1 8 h a tb prcwntaqa of ravmua Eapmditura a publ ic h a l t h i n

ro ta1 hvmw t w d i t u r w

95 MYLE 3.20: 1F IIW(E EIPWlITUE U RalC K4.W FfR it30 ff IIBIM STATES [IRIS 1969-70, 1- n0 1-

tin Wl

1 196WC I 1 W I 198P-W 5. 8tata 1-1

lp. lRr uplta : At P r m t R i c n l Y Cmstat Pricn 1 M Pmmt Rku 1 At h h t Rinr I (In bl :

: Pr capita It-&# dl hr capita lndrx of I Rr capita I*# of : Pr capita I M r $

I lin bl Emth I lln bl Wmth l lin bl Emth l lin bl Emth

where the health conditions are generally poor it is

necessary to have a large expenditure on this item, although

even this large amount is inadequate to meet the health

requirements of the people, which can be understood from

Table 3.19. The table shows that the aggregate revenue

expenditure on Public Health Services increased from Rs.

27,435 lakhs in 1969-70 to Rs. 1,39,445 lakhs in 1980-81 and

further to Rs. 3,26,454 lakhs in 1988-89. Among the 22

states, the highest revenue expenditure on public health was

incurred by Maharashtra (Rs.3,520 lakhs) in 1969-70 and Rs.

16,155 lakhs in 1980-81, but in 1988-89, Uttar Pradesh

incurred the highest (Rs.39,970 lakhs). Nagaland incurred

the lowest (Rs.181 lakhs) in 1969-70, Rs.154 lakhs (Sikkim)

in 1980-81 and again Sikkim Rs.562 lakhs in 1988-89. In

1988-89, the percentage share of revenue expenditure on

public health in the State Domestic Product is very low in

all the states, ranging from 5.7 per cent (Nagaland) to 2.5

per cent (Himachal Pradesh) among the special category

states and 2.2 per cent (Kerala) to 0.8 per cent (Uttar

Pradesh) in other than special category States.

Table 3.20 presents the growth of Revenue

Expenditure on Public Health per head of Indian States

during 1969-70, 1980-81 and 1988-89 at current and constant

prices. In real terms, Andhra Pradesh, Assam, Gujarat,

Haryana, Jammu and Kashmir, Kerala, Maharashtra, Nagaland,

Punjab, Rajasthan, Tamil Nadu and West Bengal showed a

higher per capita expenditure on public health than the all-

states per capita of Rs.5 in 1969-70; Andhra Pradesh,


Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya,

Nagaland, Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu and

West Bengal also showed a higher per capita expenditure on

public health than the all-states per capita of Rs.7.50 in

1980-81; and GUjarat, Haryana, Himachal Pradesh, Jammu and

Kashmir, Karnataka, Kerala, Maharashtra, Manipur, Meghalaya,

Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, and Tripura

showed a higher expenditure than the all-states per capita

of Rs. 9.40 in 1988-89. At current prices, the index of

growth of this expenditure ranged from 405 per cent to 866

per cent, while it ranged from 150 per cent to 188 per cent

at constant prices during 1980-81 to 1988-89.

3.12 REVENUE EXPENDITURE ON AGRICULTURE

Among developmental services, agriculture is one

of the important items of expenditures. In order to

increase the productivity and performance, the government

has incurred a large amount of expenditure on agricultural

development. Table 3.21 explains the growth of this

expenditure and its percentage share in State Domestic

Product and in the total revenue expenditure at three points

Yaar 61. Stattm .............................................................. Yo. 1969-70 1980-81 1988-89

16 Punlrb

17 Rrjarthrn

18 Sikki.

MI Statas 13,861 2,36,866 4,23,270

Bourcrt Rssarve Bank of India Bullet in, 1969-70 to 1988-89. lot. I 11 Show tk pwcmtaga * b r a of rnvmue exp.nditurr on aqrlcultura i n

s ta t# D w n t i c Product. 8 Ohon tk prcantage s b r a of ravanue axpendihra n lur icu l tura i n

Total &VM Lxpmdlturr.

: 19-70 1 1 w 1W-m 8. B b t n I__# b. Ihr c w i b : Rt k t R i c n I At h t n t P r i c n : Y O w m t Rlcn I At b s t n t Rirn

I lln bl I I Rr capita 1nd.x of: hr capita 1nd.x of : Rr caplta I r k of : hr c w i t a 1nd.r of l [ i n bl %or& I ( i n bl Errnth : ( i n kl b d h : ( i n bl h t h

11 hhua&trhtn

U llnipx

1s kq ta lya

I4 kqa1Ud

I5 Orilia

i h blab

17 b a n t t m

I8 Sikki l

19 T r i l W

m I r i p u a

21 Uttrr R u h h

P k t anprl

R11 btn

of time, viz., 1969-70, 1980-81 and 1988-89. The aggregate

expenditure of all the states has increased from Rs. 13,864

lakhs in 1969-70, to Rs. 2,36,866 lakhs in ,.1980-81 and Rs.

4,23,270 lakhs in 1988-89, nearly, an increase of 30 times.

The highest expenditure was incurred by Maharashtra Rs.

2,354 lakhs in 1969-70, Rs. 32,223 lakhs in 1980-81 and Rs.

76,203 lakhs in 1988-89. The lowest expenditure was

incurred by Nagaland (Rs. 11 lakhs), Sikkim (877 lakhs), and

(Rs. 178 lakhs) in 1969-70. Among the special category

states, the percentage share in the SDP ranged from 5

(Sikkim) to 13 (Jammu and Kashmir) in 1988-89. Among the

other states it ranged from 2.9 per cent (Madhya Pradesh) to

0.6 per cent (Uttar Pradesh) in 1988-89.


Agriculture per head of Indian States during 1969-70, 1980-

81 and 1988-89 both at current and constant prices. At

constant prices, Assam, Haryana, Jammu and Kashmir,

Maharashtra, Nagaland, Orissa, Punjab, Tamil Nadu and West

Bengal incurred expenditure above the all-states per capita

of Rs. 2.53 in 1969-70; Gujarat, Haryana, Himachal Pradesh,

Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh,

Maharashtra, Manipur, Meghalaya, Nagaland, Orissa, Sikkim

and Tripura incurred a higher expenditure than the all-

states per capita expenditure of Rs.12.80 in 1980-81; and

Assam, Gujarat, Haryana, Himachal Pradesh, Jammu and

T I L E 3.23, REVENUE EXPEIDlTlRE 01 INDUSTRIES P lNDlW STRTES WR116 19hP-70, IM RYD 1N8-89

(Rupees i n L-I m

Smlr SI. S ta tes -...-.----.---------------....----.--..--------.---~-~-~-~-- No. I969 70 1980-81 1988-89

I bndhrr Pr rd rsh I 9 3 10.0611l 1,203 10.2011l _ 7,494 lO.5Ol l l 10.7811 11.0011 l I . 8 O l t

2 Assre 113 10.2011l 701 10.30111 1,288 10.70111 11.1011 l l . 9 O l l (3.0511

3 B i h r r 250 10.09111 1.646 10.201Il 8.145 10.30111 VAQ 1 S u j r r i t 179 10.08111 1,985 10.301l l ;1223' 1b.30111

11.0011 12.1011 ( I . h b l l 5 Hr ryanr 85 IO.OPll1 576 10.2011l 1,259 10.201l l

11.2011 11.4011 10.931t h H i s r c h r l Prrdesh 439 10.70111 2,654 11.6OIl8

15 O r i s s r ' 9 0 10.08)11 621 10.2011l 4,083 10.60111 10.8011 11.10l l 12.5311

Lh Punjab 237 10,15111 I 9 5 1O. lO i I t 1,573 10.10111 12.2011 10.9011 10.8811

I 7 R r j a s t h r n 40 ( 0 . O i ) I l 1,741 10.40111 3,295 10.30111 (0.2011 12.5011 11.4011

19 S i k k i e 101 (3 .801I l 173 11.30111 13.3011 11.6711

I 9 T r a i l Nrdu 380 (0.15111 2,060 (O.3OlI l b,213 10.301l l 11.30Il l l . l O l 1 (1.8011

20 T r i p u r a 212 10.80111 8,263 11.40111 12.0011 123.518

21 U t t r r Prrdesh 297 10.0611l 2,135 10.20111 7,289 10.10111 10 .VO~l (1.0018 11.2711

22 Y l s t k n q r l 452 10.13111 15,072 10.30111 4,8M 10.20111 11.7018 113.5011 11.401

AIL S t a t e r 3,224 37,284 89,826

Source8 Reserve Bank o f I n d i a Bulletin, 19h9-70 t o 19BB-89 Ibb I 81 Bhar U* percentage share of rav*nue expend i tu re an' i n d u s t r i e s i n

8 t r t a b u s t i c Product. I 8 h a th percent rqe share o f revenue * x p m d l t u r e on i n d u s t r i e s i n

lot11 L w w f r p m d i t u r e .

102

TW 3.241 arm o RWLF mec~m a m l e m KW (F IY)IMI DPKS w i t s 1969-10, i~ RO 1wa-m lin hlpn)

1 19610 1 1 W {-8

1wa-m 8. S t r k Y1. IRr cwltr I Pt DITrnt R l c n I Rt Cmstmt Pricn I Pit b rmt R k n : Rt Cm~lnt R i r n

I Iln bl I I Rr capih 1-x dl Rr capitr Ir&r of : Rr w i t r Ird~x d I Rr capltr lndn of I lln bl h d / (in bl hl : (in bl kmih I lin bl kmih

6-3

Kashmir, Madhya Pradesh, Maharashtra, Manipur, Meghalaya,

Nagaland, Punjab, Sikkim and Tripura incurred a higher

expenditure than the all-states per capitkexpenditure of

Rs.12 in 1988-89. In real terms, the index of growth,

ranged from 1,366 per cent to 2,192 per cent at current

prices while it declined from 505 per cent to 474 per cent

at constant prices during 1980-81 and 1988-89.

3.13 REVENUE EXPENDITURE ON INDUSTRIES

The government realised the significance of

industrialisation in the promotion of economic development.

Therefore, a programme of industrialisation was launched as

a deliberate policy of the government, which led to the

increase in the 'revenue expenditure on industries in all the

states. This process of industrialisation and the growth of

expenditure are explained by Tables 3.23 and 3.24.

Table 3.23 gives an account of the growth of this

aggregate expenditure of all the states from Rs.3,224 lakhs

to Rs.37,284 lakhs and Rs.89,826 lakhs in 1969-70, 1980-81

and 1988-89 respectively, an increase of nearly thirty

times. The lowest expenditure was incurred by Nagaland Rs.16

lakhs in 1969-70, and by Sikkim Rs.101 lakhs and Rs.173

lakhs in 1980-81 and 1988-89 respectively. In absolute

terms, West Bengal ranked first in revenue expenditure on

industries with (Rs.452 lakhs) in 1969-70, Karnataka,

(Rs.3,981 lakhs) in 1980-81, and Madhya Pradesh Hs. 9,359

lakhs in 1988-89. The percentage share in the State -

Domestic Product was very low, ranging Prom 0.2 (West

Bengal) to 3.1 (Nagaland) in 1988-89.

Table 3.24 shows the growth of revenue expenditure

on industries per head of Indian states during 1969-70,

1980-81 and 1988-89 both at current and constant prices. In

real terms, Assam, Gujarat, Haryana, Jammu and Kashmir,

Karnataka, Kerala, Nagaland, Punjab, Tamil Nadu and West

Bengal incurred a higher expenditure on industries than the

all-States per capita of Rs. 0.58 in 1969-70; Assam,

Gujarat, Himachal Pradesh, Jammu and Kashmir, Karnataka,

Madhya Pradesh,, Manipur, Meghalaya, Nagaland, Rajasthan,

Sikkim, Tamil Nadu and Tripura incurred a higher expenditure

than the all-states per capita cf Rs. 1.28 in 1980-81; and

Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal

Pradesh, Jammu and Kashmir, Karnataka, Madhya Pradesh,

Maharashtra, Manipur, Meghalaya, Nagaland, Orissa, Sikkim

and Tripura incurred a higher expenditure than the all-

states per capita of Rs. 2.53 in 1988-89. At current

prices, the all-states index of growth increased from 596

per cent to 2,000 per cent, while it went up from 220 per

cent to 436 at constant prices during 1980-81 and 1988-89

respectively.

3.14 NON-DEVFLOWWT REVENUE EXPENDITURE

Non-development revenue expenditure comprises

expenditure on administrative services, maintenance of law

and order, interest payments and repayment of debt. There

was marked rise in the non-development expenditure due to

the increasing welfare and developmental activities of the

states, upward revision of pay scales and dearness

allowances and increasing law and order problems in the

states. Table 3.25 illustrates the trend in non-

developmental revenue expenditure and its percentage share

in the State Domestic Product and the total revenue

expenditure. The aggregate expenditure of all the states

increased from Rs.1,56,888 lakhs to Rs.4,08,814 lakhs and

Rs. 15,78,241 lakhs in 1969-70, 1980-81 and 1988-89

respectively (an increase of nearly 11 times). The highest

non-developmental expenditure was incurred by Maharashtra

Rs. 19,138 lakhs in 1969-70, Rs. 63,096 lakhs in 1980-81 and

Rs. 2,37,181 lakhs in 1988-89. The lowest expenditure was

incurred by Nagaland Rs.941 lakhs in 1969-70 and by Sikkim

Rs.505 lakhs in 1980-81 and Rs.2,027 lakhs in 1988-89. The

percentage share in the State Domestic Product ranged from

4.4 per cent (Uttar Pradesh) to 31 per cent (Nagaland) in

1988-89.

Table 3.26 presents the growth of non-development

revenue expenditure per head of Indian states during

106 TPPLE 3.25: II(1 -DEEIOPIEYT llEKYT E I W l D l l W IF I N D I Y STATES DURIffi 1949-70, lm-U

RUB 1988-89

Vaar 61. States ................................................................ b. 1969-70 1980-81 1988-89

1 Pndhra Prrdesh 12,597 (5.0111 27,993 13.9111 10,141 (6.2111 151.111 124.111 1 2.511

A11 6tat.s 1,U,808 4,08,814 15,78,241

BAlrce: Reserve Bank of India Bullet in, 1969-70 to 1988-89. lbtm I 11 5hoa tk p w c a t r q e share of n m developent e rpndl ture in State

DDuat ic Product. I 8hor th. yrcantape share of nan developent exp.ndlture i n Total

b v w w f x p m d i t u n .

- I I%?-70 I 1- I f

lW-8 8. 8htn k. IRl upltr : M k m t Rlcn I M Cmstnt R i c s : M Dumt P r h I RL Cmrtat R & a

: Iln k l : I Pu capltr lndlx d : Pw capita Indlx of : Pu capit. Indm of I Rr upiC I*x of : lln kl h t h : (m k l Umth I lln Rr) 6mth I lln Ql h t h

8-0 I-'

18 Sikkim - 139.8 - W.1 - 1 5 . 4 31P IW.8 .

1969-70, 1980-81 and 1988-89 both at current and constant

Prices. At constant prices, Andhra Pradesh, Assam, Gujarat,

llaryana, Jammu and Kashmir, Karnataka, Maharashtra,

Nagaland, Punjab, Rajasthan, Tamil Nadu Pnd West Bengal

showed a higher expenditure than the all-states per capita

Of Rs. 26.85 in 1969-70; Gujarat, Haryana, Himachal Pradesh,

Jammu and Kashmir, Karnataka, Kerala, Maharashtra, Manipur,

Meghalaya, Nagaland, Orissa, Punjab, Sikkim, Tamil Nadu and

Tripura showed a higher expenditure than the all-states per

capita of Rs. 22.10 in 1980-81; and Gujarat, Haryana,

Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala,

Maharashtra, Manipur, Meghalaya, Nagaland, Punjab, Sikkim

and Tripura showed a higher expenditure than the all-States

per capita of Rs. 42.90 in 1988-89. The index of growth

increased from. 222 per cent to 735 per cent at current

prices, while at constant prices it declined from 821 per

cent to 159 per cent during 1980-81 and 1988-89.

3.15 REVENUE EXPENDITURE ON ADMINISTRATIVE SERVICES

These services include the functions of the State

and different departments of the government. This

expenditure includes expenditure on general administration,

police, administration of Justice, Jail, Audit, External

affairs, etc. The expenditure on this item has increased

owing to the role of the government in maintaining law and

TAslE 3.271 REVUUE EXPEWITUIE O* IIDI(III8TRbTIVE SERVICES OF IYDllU STLTES MRIm 1969-70, 1980-81 AM# 19W-89

(Rupees i n Laths1 --

Year 61. States ............................................................... Yo. 1969-70 1980-81 1988-09

Pndhra Praderh

Asram

Bihar

8ujar.t

- . .-- - . 19 Tamil Nrdu 3,443 1 . 4 1 1 17,573 11.9111 29,654 11.7111

(12.311 (10.211 (8.711 20 Tr ipura 11,819 13.5111 7,301 (12.8111

(76.911 (20.811 21 U t t a r Pradesh 4,920 1 . 1 1 1 2,435 11.2111 83,513 (1.611:

114.814 (14.111 (14.611 22 Yrst Benqal , 3 7 7 1 . 3 1 15,072 (1.3111 33,662 (1.5111

' (16.611 113.51 1 (10.21 1

A l l States 41,143 1,65,365 5,73,872

h r c e : R n s r v e Bank of Ind ia Bu l le t in , 1969-70 t o 1988-89 h i e I I1 Shw the parcmt rqe s lu r * of revenue expenditure m ade in in t ra t i ve

s e r v i c n i n State Bamestir Product. 1 Show tM prcen tape share of revmue erpendi ture m a d e i n i s t r r t i v e

u r v i r . r la lotrl Wvnw Ex@iture.

110 TRSLE 3.28: SRWTH OF PER CbPlTb REVEWE EXPENDITURE 01 ADI(IY1SlRATIVE SERVICES OF I N D I M SIRIES

WRIYG 1969-70, l W - 8 1 AND IPW-89 ( I n R u p e s l

1980-01 1988-80 .................................. .................................... At c u r r e n t A t constant I t c u r r e n t I t constant

81. S ta tes 1969-70 p r i c e s p r i c e s p r i c t r p r i c e s no. ------- ---------------- ---------------- ---------------- ------------------

P l r Per Indea Per Index PC lndmx P t r Index c a p i t a c a p i t a of c a p i t a o f capit#' o f c a p i t a o f

( i n Rs.1 ( i n Rs.1 G r w t h ( i n Rs.1 Growth ( i n Rs.1 Bronth ( i n Rt.1 Browth

1 . A n d h r a P r a d e t h 8.1 22.5 277 8.3 102 52.1 643 11.3 130

2. b s ~ a t 11.8 26.9 228 9.9 84 73.8 625 16.0 135

3. B ihar 4.7 18.1 385 6.7 143 52.3 1112 11.4 242

4. W a r a t 7.8 28.4 364 10.5 135 61.1 783 13.3 170

5. Haryana 7.9 30.4 384 11.3 143 70.4 891 15.3 I 9 3

6. H i#acha l Pradesh - 51.0 - 18.9 - 123.0 - 26.7 - 7 J a t y l K a s h 1 I r 7 50.0 287 18.5 106 149.9 861 32.6 187

8. K a r n i t a k i 6.2 16.1 260 5.9 95 54.1 873 11.8 I 9 0

9. Kera la 6.2 10.7 301 7.5 121 48.4 780 10.5 169

lO.Nadhya Praderh 4 18.3 286 6.8 106 18.5 1070 14.9 232

1 l . l l rhararh t ra 12.1 33.3 275 12.3 102 113.2 1183 51.1 257

12.l(mipur - 83.3 - 30.9 - 238.1 - 56.1 -

13.Neqhrlaya - 92.5 - 34.3 - 305.5 - 66.4 - 14.laqaltnd 158.7 344.5 217 127.6 80 693.2 436 150.7 94

15.Or i t ra 6.0 10.8 313 6.9 110 57.8 965 12.6 210

16.PunJab 11.2 36.3 324 3 4 120 200.6 1791 43.6 389

I7.RaJasthm 7.3 19.4 266 7.2 78 47.9 656 10.4 142

18.8lkkIa - 111.3 - 41.2 - 288.5 - 62.7 - 19.Trm11 Yadu 8.5 23.3 300 9.4 110 54.7 643 11.9 140

2O.Tripura - 6b.4 - 24.6 - 298.3 - 64.8 - 2 1 , U t t a r P r a d r r h 5.7 13.8 277 5.9 104 64.8 1136 14.1 247

Z Z . k r t h n ( l t l 10.1 21.8 216 8.1 80 53.6 530 11.7 115

A11 B t a t e s 7.4 22.8 308 8.4 113 63.7 860 13.8 180

L u r e s : b n r w h k of I n d i a B u l l r t l n , V a r i w r isru@s, lY70-lPs9.

order, and the establishment of new departments and the

revision of pay scales. Table 3.27 shows the trend in this

item of expenditure and its percentage share in the State - Domestic Product and the total revenue expenditure. The

aggregate expenditure increased from Rs. 41,145 lakhs in

1969-70 to Rs. 1,65,365 lakhs In 1980-81 and to Rs.5,73,872

lakhs in 1988-89, an increase of nearly 12 times. The

highest administrative expenditure was shown by Maharashtra

(Rs. 5,985 lakhs) in 1969-70, Kerala (Rs.20,935 lakhs) in

1980-81 and again Maharashtra (Rs. 1,04,110 lakhs) in 1988-

89. The proportion of this expenditure to the State

Domestic Product was also rising in all the states.


administrative services per head of Indian states during

1969-70, 1980-81 and 1988-89 both at current and constant

prices. At constant prices all the states except Nagaland

were below the all-states average. At constant prices,

Andhra Pradesh, Assam, Gujarat, Haryana, Jammu and Kashmir,

Maharashtra, Nagaland, Punjab, Tamil Nadu and West Bengal

showed a higher expenditure on administrative services than

the all-states average of Hs.7.40 in 1969-70; Assam,


Maharashtra, Manipur, Meghalaya, Nagaland, Punjab, Sikkim,

Tamil Nadu and Tripura showed a higher expenditure than the

all-states average of Rs.8.40 in 1980-81; and Assam,

Haryana, Himachal Pradesh, Jammu and Kashmir, Maharashtra,

Manipur, Nagaland, Meghalaya, Madhya Pradesh, Punjab,

Sikkim, Tripura and Uttar Pradesh showed a higher

expenditure of Rs. 13.80 in 1988-89. The inhex of growth of

administrative expenditure of all the states increased from

308 per cent in 1980-81 to 860 per cent in 1988-89, while at

constant prices it went up from 113 per cent in 1980-81 to

186 per cent in 1988-89.

From the above analysis of the trend and growth of

state expenditure , it can be inferred that expenditure on

various items has shown an abnormal increase in nominal

terms, while the growth in real terms is slower than the

nominal growth. This may be attributed to the rising trend

in prices and growth of population.

The revenue expenditure of the state government

has shown a rapid increase than the capital expenditure,

because of the low capital formation. The socio-economic

expenditure on education, health and other services shows an

irregular pattern due to the change in the activity of the

government, change in the policies of political parties in

power, industrial changes, urbanisation, and finally

economic development.

EWl'ES AND REFWENCES

1. Hicks, U.K., Develo ment Finance Plannin and Control Clarendon Press, 0x:ord university , 196?, 'p.18.-'

2. Wagner Adolf, Three extracts on Public Finance Classics in t h a e , d T ~ ; ~ c k ~ f A ~ u b l i ~ a n ~ s . , - - - - - - - - Musgrave. F;A.--- ----- - Macmillan Co. Ltd.. London, 1958, p. 8.

3. Peacock, A.T. and Wiseman, J . , g:o_wm of Public Expenditure in United Kingdom, Oxford ~niverCi%~-FFe6S; London, 1961, p. 6.

4 . Williamson, G., "Public Expenditure and Revenue - An International Comparison," Manchester School of Economics and Social Studies, 1961, p. 47.

5. The expenditure figure is deflated by wholesale price index.

6. Special categary states conslsts of Ilimachal Pradesh. Jammu and Kashmir, Manipur, Maghalaya, Nagaland, Sikkim and Tripura.

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