Outgo on pension to exceed salary payment this fiscal: Finance Ministry

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The government's outgo on pension will exceed the expenditure on salaries by nearly Rs 10,000 crore in the current financial year, and the trend will continue for two more years till March 2021, a Finance Ministry document said today.

As per the Medium Term Expenditure Framework, tabled in the Lok Sabha, the outgo towards subsidies and interest payment too will witness substantial increase in the coming years.

However, on the positive side, the government will be able to bring down the fiscal deficit to 3 percent of GDP by 2020-21, from a projected 3.3 percent in the current fiscal and 3.1 percent in 2019-20.

The capital expenditure, a reflection of asset creation, is likely to rise from budgeted Rs 3 lakh crore in the current fiscal to Rs 3.27 lakh crore in 2019-20 and further to Rs 3.76 lakh crore.

The MTEF, which sets out a three-year rolling target for expenditure, has assumed that GDP growth of 7.3 percent in current fiscal, going up to 7.5 percent in 2019-20 and going up to 7.8 percent in 2020-21.

As per the projections, the salary bill of the government will go up from Rs 1.50 lakh crore in last fiscal to Rs 1.58 lakh crore this year. It will further rise to Rs 1.66 lakh crore in 2019-20 and Rs 1.74 lakh crore in 2020-21.

However, the pension outgo with outpace the salary expenditure going up from Rs 1.45 lakh crore in last fiscal to Rs 1.68 lakh crore in current fiscal, Rs 1.79 lakh crore in 2019-20 and Rs 1.84 lakh crore in 2020-21.

The other major increase will be witnessed in food subsidy bill which will rise from Rs 1 lakh crore last fiscal to Rs 1.69 lakh crore in current fiscal and Rs 1.87 lakh crore in 2019-20. By 2020-21 it will exceed Rs 2 lakh crore.

The petroleum subsidy will rise from Rs 24,933 crore in current fiscal to Rs 28,546 crore by 2020-21, while fertiliser subsidy will increase from Rs 70,090 crore this year to Rs 80,246 crore by end of 2020-21.

The defence outgo will increase from Rs 1.92 lakh crore in current fiscal to Rs 2.20 lakh crore in 2020-21.

Expenditure on tax administration will rise from Rs 95,684 crore this year to Rs 1.10 lakh crore by 2020-21.