Former Finance Secretary Garg Pitches For Large-Scale Expenditure Reforms
Finance Minister Piyush Goyal and Economic Affairs Secretary Subhash Chandra Garg (R) gesture during a press conference after presentation of interim Budget session. (Source: PTI) 

Former Finance Secretary Garg Pitches For Large-Scale Expenditure Reforms


Former Finance Secretary Subhash Chandra Garg said large-scale expenditure reforms are needed, to ensure that the taxes collected are spent productively.

Garg further said that "of the budgeted expenditure of Rs 27.86 lakh crore, a large part gets consumed in payment of interest and establishment expenditure".

Large-scale reforms are called for in central expenditure programme. I hope to bring out an analysis of which central government expenditure programme should be scrapped or deeply restructured and streamlined in a separate piece.
Subhash Chandra Garg, Former Finance Secretary 

He also noted that as the productivity of government expenditure is generally lower than that of private expenditure, it makes sense if the government undertakes only those expenditures that deliver benefits commensurate with the benefits forgone on the resources raised from the private sector.

Also read: Former Economic Affairs Secretary Subhash Garg Flags Understatement Of ‘Real’ Fiscal Deficit

In 2019-20, the government spent Rs 5.46 lakh crore as establishment expenditure and Rs 6.60 lakh crore as interest payments.

Also read: Budget 2020: Don’t Give Us Tax And Fiscal Sops, Just Give Us TRUST

The establishment expenditure is to take care of salaries, dearness and other allowances, pensions and other establishment-related expenditures such as travelling allowances.

Also read: RBI Governor Calls For Structural Reforms, Fiscal Measures

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