The Indian Economy Blog

June 6, 2008

5% Cut Not For Defence Expenditure

Filed under: Basic Questions,Fiscal policy,Monetary policy,Politics — Pragmatic @ 6:14 pm

Let us rejoice at the government’s consideration for the defence services. As per the finance ministry’s directive on austerity measures for the government,

All non-plan expenditure heads excluding interest payment, repayment of debt, defence capital, salaries, pensions and the finance commission grants to states will be subjected to a mandatory 5 per cent cut.[IE]

Does it really matter? After all, the unutilised amounts of defence expenditure for the tenth plan [2002-2007] were 14.46% of the total allocation.

Chicanery, in its purest, unadulterated bureaucratic form…

3 Comments »

  1. [...] Cross posted at The Indian Economy Blog [...]

    Pingback by Pragmatic Euphony » Blog Archive » No 5% cut in defence capital expenditure — June 6, 2008 @ 6:17 pm

  2. The alternative is mega corruption with ex army types working overtime as foreign sales agents.Believe me those painfully slow systems are there for a reason,the alternative is much much worse.

    Comment by Shantanu Chatterjee — June 9, 2008 @ 4:48 pm

  3. well its a welcome move but i am circumspect of its impact. Given the inflation scenario, government expenditure is bound to rise by a significant amount and this move might not be able to do anything significant at the macro level neither on the current account deficit nor on the capital formation front.

    Comment by Nitin — June 25, 2008 @ 7:24 pm

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