Expenditure on Pension

Highlights of the Expenditure on Pension Report

According to data available with the Comptroller and Auditor General of India (CAG), Expenditure on Pension was higher than the ‘salary and wages’ expenditure of the Centre and three states viz, Gujarat, Karnataka and West Bengal, during 2019-20.

Centre’s total Committed Expenditure was Rs 9.78 lakh crore during 2019-20.

• It includes an expenditure of Rs 1.83 lakh crore on pensions.
• Rs 1.39 lakh crore on salary and wages.
• Rs 6.55 lakh crore on interest payments and servicing of debts.

About Committed Expenditure

• Spending on unproductive and current heads such as salaries and pensions, interest payments and subsidies–termed as committed expenditure.
• If the Committed Expenditure is higher, it means that the government has lesser flexibility to determine the purpose for which revenue expenditure is to be incurred.

Highlights of the Report

• According to data available with the Comptroller and Auditor General of India (CAG), expenditure on pension was higher than the ‘salary and wages’ expenditure of the Centre and three states viz, Gujarat, Karnataka and West Bengal, during 2019-20.
• Centre’s total Committed Expenditure was Rs 9.78 lakh crore during 2019-20.
  • It includes an expenditure of Rs 1.83 lakh crore on pensions.
  • Rs 1.39 lakh crore on salary and wages.
  • Rs 6.55 lakh crore on interest payments and servicing of debts.
• Committed Expenditure at Union Level: It accounted for 37 per cent of its total revenue expenditure of Rs 26.15 lakh crore in 2019-20.
  • Centre’s pension bill was 132 per cent of its expenditure on salary and wages in 2019-20.
• Committed Expenditure at State Level: During 2019-20, the total Committed Expenditure of all states stood at Rs 12.38 lakh crore
  • Rs 5.47 lakh crore on salary and wages;
  • Rs 3.52 lakh crore on interest payment and servicing of debt;
  • Rs 3.38 lakh crore on pension.
  • It was almost half of their combined revenue expenditure of Rs 27.41 lakh crore.

• State-Wide Breakup of Pension Bill: Combined pension bill of 30 states and Union Territories stood at Rs 3.38 lakh crore in 2019-20.
  • It was 61.82 per cent of their combined expenditure (Rs 5.47 lakh crore) on salary and wages.
  • Across five states – Uttar Pradesh, Bihar, Maharashtra, Tamil Nadu and Odisha – the pension bill accounted for over two-third of their expenditure on salary and wages.
  • In Gujarat, the pension bill (Rs 17,663 crore) was 159 per cent of the expenditure on salary and wages (Rs 11,126 crore).
  • Karnataka’s pension bill (Rs 18,404 crore) was 126 per cent of the state’s expenditure on salary and wages (Rs 14,573 crore).
  • West Bengal pension bill (Rs 17,462 crore) was 103 per cent of the expenditure on salary and wages (Rs 16,915 crore).

Comptroller and Auditor General of India

• Constitution of India (Article 148) provides for an independent office of the Comptroller and Auditor General of India (CAG).
• He is the head of the Indian Audit and Accounts Department and is one of the bulwarks of the democratic system of government in India.
• CAG is appointed by the President of India by a warrant under his hand and seal.
• The CAG holds office for a period of six years or up to the age of 65years, whichever is earlier.
• Duties of CAG: CAG audits the accounts related to all expenditure from the Consolidated Fund of India, Consolidated Fund of each state and UT having a legislative assembly

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