UP Budget goes bigger, but fund utilisation remains a challenge
Departments were able to use only about 55% of allocated funds in the first three quarters;.there are indications that the spendings remained less than 60% till January 31, 2025.
LUCKNOW Uttar Pradesh government may have increased the allocations for various sectors with the size of the annual budget also going up year after year, but it faces the greater challenge of spending the funds.
UP’s annual budget of ₹8,08,736.06 crore for 2025-2026 was presented in the state legislative assembly on Thursday, taking the budget size up by 9.8%. The annual budget of ₹7.36 lakh crore in 2024-2025 also saw an increase of 6.7% (against the budget of 2023-2024). The government later presented two supplementary budgets with the first supplementary budget for ₹12209.93 crore and the second one for ₹17865.72 crore, thereby taking the size of total budget to ₹7.66 lakh crore.
Though a final picture of budget spending will be clear only at the end of 2024-2025, a close scrutiny indicates that various departments were able to use only about 55% of the allocated funds in the first three quarters and the situation has not improved much with indications that the total spendings remained less than 60% till January 31, 2025.
In 2023-2024, the state government estimated a revenue expenditure of ₹5.21 lakh crore, and could use only ₹4.29 lakh crore. This indicated a gap of 18% in revenue expenditure over the budgetary estimates for the financial year. There was a gap (in revenue expenditure)of 17% in 2021-2022 and 19% in 2022-2023.
The capital expenditure (on creation of development infrastructure) also reflected a wide gap between the budgetary estimates and actual expenditure. The estimates projected capital expenditure of ₹1.66 lakh crore while the actual expenditure remained only ₹1.18 lakh crore. This indicated a gap of 29% under the head capital expenditure. This gap was 38% in 2021-2022, 30% in 2022-2023.
Professor Yashvir Tyagi, former head of department, economics, Lucknow University, also expressed concern over the wide gap between the budgetary estimates and the actual expenditure. “The persistent divergence between the budgeted expenditure and the actual expenditure poses a big challenge to the government. It requires streamlining of the process to release funds to respective departments and timely execution of the programmes. The actual revenue receipts have also been observed to fall short of budget estimates. The government needs to put its act together to minimise the difference between actual and budget estimates, so that better outcomes are realised from budgetary allocations,” he said.
